Fino Payments Bank is advancing well and remains on track to meet RBI stipulated conditions for transition to Small Finance Bank (SFB) by end of Q4 FY27. According to Interim CEO Ketan Merchant, the bank expects to submit its readiness to the Reserve Bank of India by Q4 FY27, maintaining its progress within the prescribed 18-month timeline. The Reserve Bank granted 'in-principle' approval to FPBL for conversion into a SFB on December 5, 2025, under RBI guidelines for 'on tap' licensing of SFBs in the private sector. The bank has appointed PricewaterhouseCoopers to support the implementation and overall operational readiness of SFB, with technology partners onboarded for loan origination and management systems.
Merchant has been serving as Fino Payments Bank's Interim CEO since February 27, 2026, bringing over 27 years of banking experience to the role. As reported by CNBC TV18, he joined Fino Payments Bank in 2018 and has been involved in building the bank's model since its formative years. His career includes stints at HSBC, Standard Chartered and Barclays Group across retail banking and balance-sheet management. Prior to his appointment as interim CEO, Merchant was serving as Chief Financial Officer of the bank. His focus areas include growth-oriented strategies for the bank, and he played a key role in its listing in 2021.
Merchant was appointed interim CEO following the arrest of its managing director and CEO Rishi Gupta for violating laws related to the Goods and Services Tax in February. According to The Economic Times, the Directorate General of GST Intelligence (DGGI) arrested Gupta for alleged use of shell companies and payment aggregators to funnel illicit funds generated by online money gaming. However, a significant development has emerged regarding Gupta's status. In a May 21, 2026 regulatory filing, the bank received legal opinions and reports from legal firms/lawyers and consultants in relation to the investigation initiated by the Directorate General GST Intelligence, Hyderabad, against Rishi Gupta. Based on the consideration of the documents available with the Bank as on the date, including the legal opinions & reports received and the facts emanated therefrom, the Board is of a view that no prima facie case could be made out against Rishi Gupta. Accordingly, the Board of the Bank is of the view that Rishi Gupta is 'fit and proper' to continue as MD & CEO of the bank.
The bank is implementing a comprehensive strategy for its SFB transition, with technology stack for the end-to-end customer loan journey under development and expected to be ready by February 2027. As per Merchant, the bank's focus is on retail segment, customer acquisition and referral lending, with a capital position comfortably above the regulatory requirement of ₹300 crore for the proposed SFB. The bank's objective remains to build a differentiated SFB anchored on three enduring competitive strengths: strong liability franchise with cost of funds advantage of approximately 300 basis points compared to other small finance banks, asset-light lending model covering more than 95% of India's pin code, and technology-led operations built around Finacle, AI-enabled lending capabilities and robust digital infrastructure.
The bank's latest financial results show mixed performance with standalone net loss of ₹13.72 crore in Q1 FY27 compared to net profit of ₹17.76 crore in the previous quarter ended June 2025. However, total operating income rose 18.43% to ₹72.23 crore in Q1 FY27 over Q1 FY26. The bank continues to focus on its three-pronged DDD strategy — Data, Distribution and Digital as part of its Fino 2.0 vision, which has driven significant growth across multiple business segments.
The bank demonstrated strong operational performance with its customer base reaching 1.5 crore, adding more than 6.8 lakh new accounts during the quarter. As reported by CNBC TV18, total throughput increased 17% year-on-year to ₹1,23,542 crore, while digital throughput rose 54% to over ₹67,800 crore. Average deposits grew 34% year-on-year to ₹2,275 crore, with revenue from CASA increasing 30% to ₹154 crore and digital payment services revenue rising 59% to ₹106 crore.
