Fino Payments Bank has applied to the Reserve Bank of India (RBI), seeking a small finance bank license, the regulator said in a release.
“During the quarter ended December 31, 2023, the RBI received one application under the Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector dated December 5, 2019 from Fino Payments Bank Limited,” it said.
As per the norms, payment banks that are controlled by residents and have completed five years of operations are eligible for conversion into small finance banks after complying with the legal and regulatory requirements of various authorities.
Fino Payments Bank started operations in 2017 and completed five years of business in 2022. In July 2023, MD and CEO Rishi Gupta said that the bank was keen to become a small finance bank.
The payments bank is a subsidiary of Fino Paytech, which is backed by investors such as Bharat Petroleum, ICICI Group, Blackstone, IFC, Intel, and Life Insurance Corporation of India, among others.
Originally a remittance service provider, Fino Payments converted all its Fino Money Mart outlets into bank branches after it received the payments bank license. It is also the only payment bank to be listed on the bourses.
The Mumbai-based lender has an asset-light model that largely relies on fee- and commission-based income generated from merchant networks and strategic commercial relationships. Profitable since Q4 FY20, the payments platform processed 121 crore transactions worth around ₹2.6-lakh crore in FY23, posting a profit of ₹65 crore for the year.