RBI gave Fino in-principle clearance on December 5, 2025. The bank is working within an 18-month preparation window and has engaged PricewaterhouseCoopers to support the transition. This initial approval is a step towards becoming a Small Finance Bank, rather than confirmation that the conversion is complete.

Technology is a key part of the work. Fino expects its loan application and loan servicing systems to be ready by February 2027. It also plans to use Finacle and artificial intelligence to support lending, while strengthening governance, compliance processes and operating procedures for RBI scrutiny.

The shift would allow Fino to lend directly, an activity unavailable to payments banks. For now, its focus remains on retail customers and referring loan leads to other lenders. The bank said its capital comfortably exceeds the ₹300 crore net-worth requirement for an SFB licence.

Fino estimates that its existing low-cost savings deposit base could give it a funding-cost edge of 300 basis points over other SFBs. It intends to tap a network reaching 95% of Indian pin codes to attract customers and offer secured lending without a large physical branch footprint. These are the bank’s stated expectations and plans.