Fino Payments Bank shares climbed 13% after reporting a 31% rise in total accounts and a 253% surge in loan referral disbursals. The update highlights progress in its transition to a Small Finance Bank, even as the company manages a decline in overall payment processing volumes.
Fino Payments Bank saw its stock price rise 13% to ₹153 on Monday following the release of an encouraging business update for June 2026. The bank reported that its core customer base grew significantly, with the total number of accounts reaching 1.8 crore, a 31% increase compared to the same period last year. The bank added over 3.1 lakh new accounts during the month, reflecting sustained demand for its basic banking services.
Digital adoption also showed positive momentum, with active users on the FinoPay mobile application rising by 38% to 8.4 lakh. This growth in digital activity is important as the company works to transition its business model. A major highlight of the report was the expansion of the bank's loan referral business, which acts as a testing ground for its upcoming shift to a Small Finance Bank (SFB). Referral loan disbursals surged 253% to approximately ₹240 crore, signaling that the bank is effectively leveraging its existing customer network to generate credit business.
Transition to Small Finance Bank
The bank is currently preparing for its transition to an SFB, having secured in-principle approval from the Reserve Bank of India in December 2025. While the loan referral growth is a positive sign for this shift, the bank is also managing a change in its payment processing segment. The total value of payments processed by the bank declined by 35% compared to the previous year. The company attributed this drop to a structural shift where consumers and merchants are moving away from cash-based transactions toward the Unified Payments Interface (UPI). Additionally, the bank has narrowed its focus toward higher-quality merchants, which can naturally reduce total transaction volumes in the short term. Management noted that the pace of this decline is slowing, which may suggest that the payment business is reaching a point of stability.
Financial Context and Investor Monitorables
For investors, the primary area of focus will be how the bank maintains its profit margins during the high-cost transition to an SFB. While the loan referral business shows rapid growth, scaling lending operations will require different capital requirements and risk management processes compared to a pure payments bank model. The bank's ability to convert its large existing customer base into profitable loan clients will be a crucial factor in the coming quarters. Investors should track the progress of the final regulatory licenses required for the SFB, as well as the trend in the payment processing volume to see if it stabilizes as expected. The stock has shown strong recent momentum, outperforming the Nifty 50 over the past month, but future share price movement will likely depend on the actual execution of the SFB transition and the quality of the loan book as it expands.