RBI Fines Fino Payments Bank INR 29.6 Lakh For Flouting Norms

SUMMARY

The RBI said it has imposed a penalty on Fino Payments Bank for non-compliance with certain directions on ‘licencing of payments banks’

The Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank was with reference to its financial position as of March 31, 2024

Shares of the company closed 3.5% higher at INR 291.8 apiece on the BSE yesterday,

The Reserve Bank of India (RBI) said it has imposed a penalty of INR 29.6 Lakh on Fino Payments Bank for non-compliance with certain directions on ‘licencing of payments banks’.

The Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank was conducted by the RBI with reference to its financial position as of March 31, 2024. During this inspection, the central bank found that the bank had not followed all its guidelines.

Based on the supervisory findings of non-compliance and related correspondence in that regard, the RBI said that a notice was issued to the Fino Payments Bank, advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.

The central bank said Fino Payments breached the regulatory ceiling of end of the day balance in certain accounts on several occasions.

In a regulatory filing, Fino Payments Bank said that the RBI spotted the non-compliance with regard to the licensing guidelines for payments banks, wherein ‘end of day’ balance was more than prescribed limit of INR 2 Lakh in case of four accounts of the bank for the period from February to November, 2023.

The bank action is based on the deficiencies in the regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI said in a statement.

Shares of the company closed 3.5% higher at INR 291.8 apiece on the BSE yesterday, compared to its previous close of INR 282.05 per share.

Meanwhile, the bank gained 6.41% to end the previous week at INR 283.15 apiece. In the past 12 months, the stock has lost over 15% in value.

In 2018, Fino Payments was imposed a fine of around INR 1 Cr by the RBI for allegedly opening new accounts despite directions not to do so.

The fine imposition comes about a month after the company shared its outlook for the current financial year FY26. CFO Ketan Merchant said that the payments bank is now targeting a 20-25% growth in its FY26 top line.

On the financial front, Fino Payments Bank’s net profit slipped 5% to INR 24 Cr in Q4 FY25 from INR 25.2 Cr in the year-ago quarter. The company’s total income during the quarter under review stood at INR 493.5 Cr, up over 23% from INR 401.3 Cr in Q4 FY24.