Fino Payments Bank has extended the tenure of interim Managing Director and CEO Ketan Merchant by three months until November 26, 2026, subject to RBI approval. This move provides leadership stability as the bank navigates a transition to a Small Finance Bank while managing the impact of its former CEO’s legal issues from earlier this year.
Fino Payments Bank’s board has approved a three-month extension for Ketan Merchant to continue as the interim managing director and chief executive officer. The extension, which was recommended by the bank’s Nomination & Remuneration Committee, is set to begin on August 27, 2026, and run through November 26, 2026. The appointment now awaits final approval from the Reserve Bank of India (RBI).
Ketan Merchant, who previously served as the company’s Chief Financial Officer, took on the interim leadership role in February 2026. This change followed the arrest of the former MD and CEO, Rishi Gupta, by the Directorate General of GST Intelligence. Mr. Gupta was apprehended over alleged violations of Goods and Services Tax laws involving the use of shell companies and payment aggregators. This legal event created an immediate leadership vacuum that necessitated a swift transition.
Transition to Small Finance Bank
The leadership extension comes at a time when the bank is focused on a major strategic pivot: its transition into a Small Finance Bank. This shift is intended to allow the bank to expand its lending capabilities and broaden its product offerings. Successfully completing this regulatory and operational transition is a primary goal for the current management team.
Financial Performance and Challenges
Investors are paying close attention to the bank's financial stability during this period of change. In the quarter ended June 2026, Fino Payments Bank reported a standalone net loss of ₹13.72 crore. The bank is currently dealing with competitive pressures and the cost of building the infrastructure required for its new business model. These financial results highlight the difficulty of balancing expansion efforts with the need for immediate profitability.
Beyond the financials, the bank faces risks related to the execution of its Small Finance Bank roadmap. Additionally, institutional shareholding remains relatively low, which can impact stock liquidity. The upcoming months will be important as the bank works to stabilize its leadership, secure the necessary regulatory nods for the transition, and demonstrate progress in its path toward becoming a Small Finance Bank. Investors will likely monitor further announcements regarding the RBI's stance on the CEO appointment and updates on the progress of the SFB conversion.