Fino Payments Bank Shares Plunge 13% After RBI's SFB Nod

Fino’s FY26 Gameplan: CASA & UPI Expansion To Bolster FY26 Top Line By 20-25%

SUMMARY

Shares of Fino Payments Bank plunged as much as over 13.5% to INR 271.95 on the BSE. The shares ended the day’s trade 11.3% lower at INR 278.95

The company’s market capitalisation stood at $257.8 Mn (INR 2,321.38 Cr), down about 11% from $290 Mn at the end of Friday’s trading session

Recently, the company received an in-principle approval from the RBI to operate as a small finance bank (SFB), making it the first new-age tech company to receive such a regulatory approval

Despite reporting a positive development recently, shares of Fino Payments Bank plunged as much as over 13.5% to INR 271.95 on the BSE. The shares ended the day’s trade 11.3% lower at INR 278.95.

The company’s market capitalisation stood at $257.8 Mn (INR 2,321.38 Cr), down about 11% from $290 Mn at the end of Friday’s trading session.

On Friday, the company received an in-principle approval from the RBI to operate as a small finance bank (SFB), making it the first new-age tech company to receive such a regulatory approval. The approval has been much awaited, given the fact that the bank had applied for the SFB licence with the RBI in January 2024.

Payments banks in India focus on basic banking and payments for underserved populations without credit risk, while SFBs provide full banking services including lending to unbanked and small business segments.

Speaking with Inc42 in May, Fino’s CFO Ketan Merchant highlighted that transitioning to an SFB was the company’s main goal in FY26. He shared that the move will allow it to add lending capabilities to its existing asset-light payments bank model.

Under its SFB model, Fino plans on sharpening its focus on customer deposits, including those in savings and checking accounts, using its existing distribution network and tech infrastructure.

Fino’s transition to SFB is fundamentally enabled by its existing, dominant performance in retail banking. For instance, about 75% of its top line in Q2 came from retail banking owed to its strong CASA (Current and Savings Account) deposits and high-volume transaction businesses (DMT, micro-ATM, AePS).

Overall, Fino Payments Bank posted a 27.5% YoY jump in its net profit for Q2 FY26 to INR 15.3 Cr. The payments bank’s income from interest rose 26% to INR 60.1 Cr from INR 47.7 Cr in Q2 FY25.

Although the development seems positive for the company, the fall today could be a result of profit-booking by the investors, especially as the stock rallied around 17% in the last ten sessions. However, on a YTD basis, the company’s shares have dipped close to 16%.