Fino Payments Bank Settles Disclosure Lapse Cases With SEBI

Fino Payments Bank has settled a case pertaining to alleged disclosure lapses with the Securities Exchange Board of India by paying a settlement amount of INR 5.89 Lakh.

The case pertains to a show cause notice issued by SEBI to the bank in October last year for alleged delays and inadequacy in disclosing material events.

The markets regulator in the notice said that Fino Payments Bank received 15 complaints alleging fraudulent investment schemes being run by its employees. Subsequently, KPMG was appointed to investigate the matter, and it submitted its report on November 8, 2023. However, Fino Payments Bank failed to make adequate disclosure within 24 hours and did not provide subsequent updates as mandated, SEBI alleged.  

After receiving the notice, Fino Payments Bank proposed settling the proceedings without admission or denial of the findings in the case. The bank also submitted to the regulator the steps taken by it to strengthen its disclosure processes and internal compliance framework with regard to the issues highlighted in the show cause notice. 

Subsequently, the bank was allowed to settle the proceedings by paying the settlement amount of INR 5.89 Lakh. 

It is pertinent to note that 19 employees of Fino Payments Bank floated fraudulent investment schemes between December 2021 to April 2023. Of these, the bank terminated 17 employees and the remaining two handed in their resignation on the receipt of warning letters.

Fino Payments Bank clarified then that the matter had no direct impact on it and the money of the customers was safe and secure.

Shares of Fino Payments Bank were trading 3.45% higher at INR 309.25 on the BSE at 10:50 today.

Notably, earlier this year, the RBI also imposed a penalty of INR 29.6 Lakh on Fino Payments Bank for non-compliance with certain directions on ‘licencing of payments banks’. 

The payments bank is currently looking to transition to a small finance bank, for which it submitted its application to the RBI in January 2024.

On the financial front, Fino Payments Bank’s net profit for Q1 FY26 fell 27.4% to INR 17.7 Cr from INR 24.3 Cr in the same period last fiscal year, hurt by rise in tax expense. Total income for the reported quarter rose 3.8% to INR 453.5 Cr from INR 436.8 Cr in Q1 FY25.

The payments bank is targeting a 20% growth in its top line in FY26.