Fino Payments Bank has announced a significant technological upgrade with the migration of its Core Banking System to the Finacle platform. The bank informed stock exchanges on January 6, 2026, that all banking services will remain unavailable for nearly two days during the planned migration period.

Migration Timeline and Service Impact

The Core Banking System migration is scheduled as follows:

During this transition period, customers will not be able to access any banking services. The bank has advised users to plan their transactions in advance to avoid inconvenience during the downtime.

Strategic Digital Transformation Initiative

This migration represents a key component of Fino Payments Bank's ongoing digital transformation program. The bank is implementing the new core banking system to strengthen its technology infrastructure and maintain leadership in technology innovation.

The new Finacle-based Core Banking System will function as the bank's digital backbone, providing several operational advantages:

• Enhanced operational efficiency across all banking operations
• Greater system resilience and reliability
• Improved scalability to support business growth
• Support for faster rollout of new products
• Better service delivery across all customer touchpoints
• Stronger risk management and regulatory compliance capabilities

Stock Performance and Market Response

Following the announcement, Fino Payments Bank's shares ended lower on January 6:

Exchange Communication Details

The bank's disclosure was made to both major Indian stock exchanges under SEBI Listing Regulations. The communication emphasized the strategic nature of this technological upgrade as part of the bank's commitment to operational excellence and digital innovation.

Fino Payments Bank is set to expand its workforce significantly as it transitions from a payments bank to a small finance bank (SFB), with plans to add 600 employees over the next three years. The Navi Mumbai-headquartered entity received in-principle approval from the Reserve Bank last month for this strategic transformation.

Revenue Strategy and Business Model

Despite the transition to lending operations, transaction income will remain the dominant revenue stream for Fino Payments Bank. Managing Director and Chief Executive Rishi Gupta indicated that transaction fees are projected to contribute 75% of the topline even three years after operationalising the SFB, suggesting limited reliance on interest income.

Target Market and Lending Strategy

The bank plans to leverage its extensive existing network for its lending operations. Fino Payments Bank will primarily target its current base of merchants and customers, utilizing the substantial data and insights accumulated over years of transaction processing.

Gupta emphasized that the bank's biggest asset in this transition is its wide network built over nearly two decades and the absence of an existing asset or loan base. This clean slate approach differentiates Fino from many existing SFBs that transitioned from microfinance operations with legacy portfolios of riskier, unsecured assets.

Operational Infrastructure and Technology

The bank is implementing several technological and operational enhancements to support its SFB operations:

• Development of an artificial intelligence-powered, fully digital customer onboarding journey
• Migration to a new core banking platform
• Adoption of a hub and spoke model utilizing the existing network
• Establishment of approximately 100 outlets or hubs to process requirements for the network

Financial Position and Cost Management

Fino Payments Bank maintains a strong financial foundation for its transition. The entity currently holds liabilities of over ₹3,000.00 crore with a cost of funds below 2%. This low cost of funds is attributed to the bank's distribution strength, which is expected to continue benefiting the SFB operations.

Gupta noted that the cost of transition to SFB will be limited, as a significant portion of the core banking system costs has already been incurred. The focus on hiring additional personnel will help the organization gain the necessary expertise to handle new processes as an SFB.

Regulatory Timeline and Next Steps

The Reserve Bank has provided Fino Payments Bank with an 18-month period to meet specific requirements before receiving final approval for the SFB conversion. This timeline allows the bank to implement its planned operational changes, technology upgrades, and workforce expansion while ensuring compliance with regulatory standards.

The hub and spoke operational model is designed to optimize costs by eliminating the need for traditional branch infrastructure, instead leveraging the existing network for SFB operations while maintaining centralized processing capabilities.