The Reserve Bank of India (RBI) is likely to grant final approval to Fino Payments Bank for its transition into a small finance bank (SFB), subject to the lender meeting a set of conditions, people familiar with the development told ET Now.
As part of the conditions, Fino will have to appoint an external chief executive officer with substantial banking experience.
The new CEO is expected to be a banking veteran who can lead the institution with a clean slate, sources said.
Fino Payments Bank is working towards meeting the conditions sought by the regulator, they added. Queries sent to Fino Payments Bank and the RBI did not elicit a response until publication.
Fino began operations as a payments bank in June 2017, leveraging its technology-led financial inclusion network and merchant ecosystem to provide banking services, particularly to underserved customers. It became the first payments bank in India to turn profitable and subsequently went public in November 2021. Its board approved the proposal to transition into an SFB in July 2023, and the bank formally applied to the RBI in December 2023.
The leadership change is another important development in the transition. Rishi Gupta, who had led Fino for nearly two decades, stepped down as MD and CEO in May 2026, seeking voluntary early retirement following his arrest in a GST investigation linked to the real-money gaming sector. The bank’s board had maintained that it found no prima facie case against him.
CFO Ketan Merchant subsequently took charge as interim CEO, with his tenure extended by the RBI.
The appointment of a regular external CEO and changes to the promoter’s shareholding structure are now key requirements for Fino to secure the final regulatory clearance.