Fino Payments Bank is likely to get the RBI’s final approval to become a small finance bank (SFB) if it meets a set of conditions, ET Now reported on Friday, October 30, citing people familiar with the matter. The report came a day after the bank posted a loss for the September quarter.
According to the report, the RBI wants Fino to appoint an external chief executive with substantial banking experience. It also wants the promoter, Fino Paytech, to restructure its shareholding so that Bharat Petroleum Corporation (BPCL), which holds about 22%, cuts its stake below 15%. Interim CEO Ketan Merchant has run the bank since Rishi Gupta stepped down in May 2026 after his arrest in a GST investigation. The RBI gave in-principle approval on December 5, 2025, with 18 months to complete the conversion, which would allow Fino to lend. Neither Fino nor the RBI replied to ET Now.
For Q2 FY27, Fino reported a net loss of ₹20.9 crore against a profit of ₹15.4 crore a year earlier, as other income fell 24% to ₹259 crore. Net interest income rose 20% to ₹39 crore, and deposits rose about 10% to ₹2,299 crore.
Why it matters: Payments banks cannot lend, which limits what they earn from deposits and a large merchant network, and conversion would let Fino build a loan book on top of that base. The reported conditions show the RBI putting governance first: a banking veteran at the top and less weight for a single corporate shareholder. Fino has said it expects to tell the RBI it is ready by the end of Q4 FY27, so the CEO search now sets the pace.
Source: ET Now; The Hindu BusinessLine
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