Fino Payments Bank Reports Strong Deposit Growth in April, Transaction Volume Dips

Fino Payments Bank's April 2026 business update reveals a significant surge in its loan referral business, with disbursals tripling to ₹166 crore. Renewal income also saw a 9% year-on-year increase, reaching ₹19.3 crore.

However, the bank faced a substantial 47% year-on-year decrease in overall transaction business throughput, which fell to ₹2,649 crore. The B2B - UPI P2M Throughput experienced a particularly sharp 96% year-on-year drop, decreasing to ₹101 crore. Fino attributes these volume declines partly to ecosystem shifts and a strategic recalibration of its digital payments operations.

Strategic Focus and Deposit Growth Drivers

The bank's emphasis on mobilizing CASA (defined as Customer Acquisition and Sustained Augmentation) deposits is key to its strategy for improving margins and supporting its long-term objective of evolving into a Small Finance Bank (SFB). The rise in deposits and digitally active customers highlights growing customer loyalty and trust, essential for Fino's banking aspirations. While the dip in transaction volumes may indicate a strategic pivot away from lower-margin services, it also presents challenges for fee-based income.

Fino's Transition to a Small Finance Bank

As a payments bank in India, Fino is actively working towards transitioning to an SFB model. This strategic shift aims to enable broader lending activities and diversify revenue streams by leveraging its existing customer base and merchant network.

Key Strategic Shifts and Outlook

Shareholders can expect an intensified focus on CASA deposit mobilization and sustainable growth in digitally active customers and app users. The expansion of the loan referral business is a key part of its evolving SFB strategy, moving towards quality and sustainable growth over raw transaction volume.

Risks and Regulatory Considerations

It is crucial to note that the reported figures are provisional and unaudited. The significant year-on-year decrease in transaction business throughput and B2B UPI volumes poses a challenge for fee-based income. Additionally, Fino may continue to be influenced by past regulatory scrutiny from the RBI regarding digital onboarding and KYC norms.

Competitive Landscape

Fino Payments Bank operates in a competitive space alongside India Post Payments Bank and Paytm Payments Bank. India Post Payments Bank focuses on financial inclusion, while Fino is building its CASA franchise and pursuing an SFB transition. Paytm Payments Bank is currently facing regulatory sanctions, impacting its competitive standing.

What to Monitor Next

Investors will be watching for continued momentum in deposit franchise growth and sustained increases in digitally active customers. The performance of the loan referral business under the SFB strategy is also a key indicator. Management commentary on mitigating transaction throughput declines and progress towards an SFB license will be closely tracked.