Fino Payments Bank Limited

Fino Payments Bank received in-principle approval from the RBI to transition into a small finance bank (SFB), marking it as the first payments bank to achieve this milestone. This approval is seen as a key inflection point, enabling deeper customer relationships and expanded financial inclusion. The bank aims to build a loan book of ₹8,000-10,000 crores by FY 2030, maintaining a Net Interest Margin (NIM) of around 10% on a largely secured portfolio and a credit cost below 1%. The SFB model will leverage its merchant-led ecosystem for asset-light sourcing, with minimal physical infrastructure spend of ₹15 crores annually.

For Q3 FY26, Fino Payments Bank reported a revenue of ₹394.4 crores, a sequential decline of 1% and a YoY decline of 15%. Despite this, EBITDA grew 6% YoY to ₹63.9 crores, with the EBITDA margin improving to 16.2% from 13% in the prior year. The net revenue margin also saw a significant increase of 540 basis points YoY, reaching 37.5%. For the first nine months of FY26, EBITDA grew 10% YoY to ₹187.1 crores, while PBT (including one-off^📎) declined 20% YoY to ₹63.3 crores.

The bank's strong CASA-based liability is a key differentiator, with approximately ₹2,500 crores in CASA and an additional ₹500 crores in deposits with other banks, totaling around ₹3,000 crores in low-cost deposits. The cost of funds has remained under 2% for the past nine months. Average deposits grew 32% YoY to ₹2,496 crores in Q3 FY26. The bank added 8.7 lakh accounts this quarter, bringing the total to 1.68 crores, with average CASA balance improving 9% YoY to ₹1,314.

Digital throughput for 9M FY26 reached ₹196,740 crores, growing 31% YoY and increasing its share of total throughput to 55% from 46% in the prior year. However, digital payments revenue in Q3 FY26 declined 43% YoY to ₹62.7 crores. This decline is attributed to enhanced regulatory scrutiny, the real money gaming ban, and increased checks slowing down merchant onboarding. Despite these headwinds, the bank is expanding its reach through strategic tie-ups with payment aggregators and gateway partners, with active merchants in this segment growing to 347 in December 2025 from 175 in September 2025.

The CMS segment experienced moderation, with revenue declining 27% in Q3 FY26 to ₹29.6 crores due to pricing competition and structural shifts. Traditional businesses like remittance, AEPS, and micro ATM saw a 14% decline in revenue as the ecosystem shifts towards digital channels. The bank is consciously prioritizing sustainability and scalability over short-term volume-led growth, with high-margin businesses (CASA-led) now contributing around 40% of total revenue, while low-margin transaction-led businesses account for about 18%.

Fino Payments Bank has completed a critical milestone by migrating its core banking system to Finacle, providing a flexible and scalable technology backbone. The bank plans to invest approximately ₹100 crores over the next year to build the additional technology stack required for SFB operations. In terms of human capital, the bank is actively hiring for critical SFB verticals, with top-level hiring expected to be completed within the next one to two months, and does not foresee significant challenges in talent acquisition.