According to Gupta, the bank applied to the central bank in December 2023 for a permission to function as a small finance bank, and it is still awaiting an answer from the authority.
CEO and MD Rishi Gupta of Fino Payments Bank said that the bank is awaiting a decision from the Reserve Bank of India (RBI) about its application to become a small finance bank, having previously registered as a payments bank. "We submitted an application in December 2023 for the SFB license. We are awaiting the RBI's feedback on the application," Gupta said to Moneycontrol.
On January 8, the RBI announced that it had received an application for an SFB license. "The Reserve Bank of India has received one application under the Guidelines for 'on tap' Licensing of Small Finance Banks in the Private Sector dated December 05, 2019 from Fino Payments Bank Limited during the quarter ended December 31, 2023," the RBI said.
The proposal for the conversion of Fino Payments Bank into an SFB was approved by the board on July 28, 2023. The payments bank said that it has formed a committee to investigate the potential for group corporate restructuring and assess its consequences together with other factors.
The bank recorded a net profit of Rs 25.21 crore for the fourth quarter of 2023–24, up 14.2 percent from Rs 22.08 crore at the same period the previous year.
The company's net profit increased by 10% sequentially from Rs 22.80 crore in Q3FY24. Revenue at the payments bank with its headquarters in Mumbai increased by 24% to Rs 401.3 crore in Q4FY24 from Rs 323.43 crore in Q4FY23. The company's sales increased 8.4% sequentially from Rs 370.2 crore in Q3FY24.
The fourth quarter of the previous fiscal year witnessed an increase in the company's expenses.
From banks that process payments to SFB
According to Gupta, the bank is now working on the digital transformation necessary to make the move from a payments bank to a small financing bank. Gupta said, "We are rebooting our entire technology platform, which will eventually include the SFB technology piece."
He continued by saying that for some products, the bank is eager to collaborate with sizable non-banking financial corporations (NBFCs). In order to have a deeper understanding of the industry, we are collaborating with a few major NBFCs on a number of large asset products. Additionally, Gupta said, "We are gradually expanding our asset-side staff inside the bank.
A payments bank is a regular bank that is digitally first and primarily focused on making payments easier. In order to increase financial inclusion, the RBI devised this novel regulatory innovation.
Up to Rs 2 lakh may be deposited by a consumer into their payments bank account. Payment banks are not allowed to provide any lending services in the credit domain.
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