Fino Payments Bank's Strategic Leap to Small Finance Bank

Fino Payments Bank plans to transition into a Small Finance Bank (SFB), adding 600 staff over three years. Despite this shift, transaction income is set to dominate, contributing 75% to revenues. Targeting existing merchants and customers, the bank will embrace digital transformations, maintaining low operational costs.

Fino Payments Bank, based in Navi Mumbai, is fast-tracking its transition to a Small Finance Bank (SFB) with plans to employ an additional 600 personnel over the upcoming years. Despite this shift, the bank's top executive, Rishi Gupta, revealed that transaction income is projected to remain the dominant revenue stream, contributing three-quarters of the total income three years post the start of lending operations.

Gupta emphasized that the bank's extensive network, built over two decades, is its primary strength in transitioning to an SFB. Unlike other SFBs, Fino lacks an asset or loan base, allowing it to de-risk by focusing on secured advances, with up to 80 percent of loans being secured.

The bank aims to cater to its base of 8 lakh merchants and 1.6 crore customers, leveraging existing data on their financial habits. To streamline operations, Fino plans to embrace an AI-driven, digital customer onboarding experience and migrate to a new core banking platform. The Reserve Bank has granted an in-principle nod for the conversion, marking a significant evolution in Fino's banking journey.

(With inputs from agencies.)