<p>The Reserve Bank of India (RBI) has received an application from Fino Payments Bank seeking a license to do business as a small financing bank (SFB).</p>
<p><img decoding=”async” class=”alignnone wp-image-343798″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-application-filed-fino-payments-bank-requests-rbi-sfb-license-rbi-repo-shaktikanta.jpg” alt=”theindiaprint.com application filed fino payments bank requests rbi sfb license rbi repo shaktikanta” width=”1149″ height=”766″ title=”Application Filed: Fino Payments Bank Requests RBI SFB License 9″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-application-filed-fino-payments-bank-requests-rbi-sfb-license-rbi-repo-shaktikanta.jpg 510w, https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-application-filed-fino-payments-bank-requests-rbi-sfb-license-rbi-repo-shaktikanta-150×100.jpg 150w” sizes=”(max-width: 1149px) 100vw, 1149px” /></p>
<p>The proposal to convert the bank into an SFB was approved by the board of the bank on July 28. The payment bank also declared the establishment of a committee whose duties would include examining the possibility of group corporate restructuring, evaluating the consequences, and taking other pertinent aspects into account.</p>
<p>The Reserve Bank of India (RBI) launched SFBs, a particular kind of specialty bank, in 2016 with the goal of advancing financial inclusion. Their primary objective is to assist the neglected and unbanked segments of the nation, such as small enterprises, industries, and marginal farmers, by providing basic banking services including taking deposits and making loans.</p>
<p>The Reserve Bank of India announced in a statement on January 8 that it has received one application from Fino Payments Bank Limited under the Guidelines for “on tap” Licensing of Small Finance Banks in the Private Sector, dated December 05, 2019.</p>
<p>According to the procedure, the regulator is reviewing the application and waiting for more feedback from the RBI, according to Fino.</p>
<p>“The Bank has seen an 85% year-over-year (YOY) increase in earnings as it continues its drive to bring on new clients. The Bank is steadily improving its sustainability with each quarter that goes by, and it is in a good position to take use of its network, the bank had previously said.</p>
<p>On Monday, the RBI approved Payments Bank’s elevation to SFB status and increased the minimum capital requirement for small financing banks to Rs 200 crore. Coincidentally, the combined net value of all SFBs in existence at this time exceeds Rs 200 crore.</p>
<p>With the release of the updated guidelines, the RBI stated that in order for Primary (Urban) Co-operative Banks (UCBs) to voluntarily transition into SFBs, their net worth must first meet the threshold of Rs 100 crore and then rise to Rs 200 crore within five years of the date of business commencement.</p>
<p>Payment banks that meet all other requirements and have been operating for five years may seek to become SFBs, according to the criteria.</p>
<p>Q2 results for Fino Payments Bank</p>
<p>Fino Payments Bank had a notable 41.5 percent year-over-year (YoY) growth in its consolidated profit after tax (PAT), reaching Rs 19.5 crore, in the second quarter of the financial year 2023–24 (FY24). Both a growing user base and strong transactional activity are responsible for this noteworthy rise. For comparison, during the same time previous year, the bank had a PAT of Rs 13.8 crore.</p>
<p>The bank’s income increased by 18.2 percent to Rs 358.6 crore in Q2 FY23 from Rs 303.3 crore. Simultaneously, the overall spending, exclusive of provisions and contingencies, saw a 16.9% rise, amounting to Rs 338.50 crore as opposed to Rs 289.5 crore during the same time last year.</p>
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