In December 2025, the Reserve Bank of India (RBI) granted in-principle approval to Fino Payments Bank Limited (FPBL) to convert into a Small Finance Bank (SFB), becoming the 1st Payment Bank(PB) in India to get such approval.
- This conversion will enable the FPBL to accept larger deposits, provide loans, and credit facilities to individuals and small enterprises, and expand its customer base and services.
Exam Hints:
- What? RBI Granted in-principle Approval to FPBL
- Approval For: Conversion of FPBL into a SFB
- Significance: 1st Payments Bank in India to receive such approval.
- Under: ‘On Tap’ Licensing of SFBs in the private sector
- Eligible Applicants: Existing PBs which are controlled by residents and have completed 5 years of operations
- Net Worth Requirement: Rs 300 crore
Key Details of Approval:
Background: FPBL, which was operationalized in 2017, had applied for a SFB license in December 2023.
Approval Granted Under: Fino’s application for SFB license was examined under the ‘On Tap’ Licensing of SFBs in the private sector, aimed to promote financial inclusion and competition.
Additional Condition: Also, the conversion of branches of PB into SFB branches will be done as per the stipulations in the RBI (Small Finance Banks-Branch Authorisation) Directions, 2025.
SFB League: With this conversion, Fino will join a list of 11 existing SFBs: AU SFB, Equitas SFB, Suryoday SFB, Utkarsh SFB, Jana SFB, Unity SFB, Capital SFB, ESAF SFB, Ujjivan SFB, Shivalik SFB, and Slice SFB.
Eligibility Criteria for Conversion from PB to SFB:
Eligible Applicants: As per RBI’s ‘on tap licensing’ norms, existing payment banks which are controlled by residents and have completed 5 years of operations are eligible to apply for conversion into SFBs.
Capital Requirement: PB interest for conversion into a SFB, is required to maintain a minimum net worth of Rs 300 crore, or,
- It is required to infuse additional paid-up voting equity share capital to achieve net worth of Rs 300 crore within 18 months from the date of receiving in-principle approval or as on the date of commencement of operations, whichever is earlier.
CAR: It is mandatory for a SFB to maintain a minimum Capital Adequacy Ratio (CAR) of 15% of its Risk Weighted Assets (RWAs) on a continuous basis, subject to any higher percentage as may be prescribed by RBI from time to time.
Shareholding: Promoters are required to hold a minimum 40% of paid-up voting equity for the 1st 5 years.
- In case, the promoter shareholding exceeds 40% initially, then, it must be reduced to that level within 5 years.
Branches : Also, it is mandatory for an SFB to open at least 25% of its branches in unbanked rural centres.
About Fino Payments Bank Limited (FPBL):
Managing Director (MD) and Chief Executive Officer (CEO)- Rishi Gupta
Headquarters- Navi Mumbai, Maharashtra
Established- 2017
