Fino Payments Bank Settles SEBI Case for Rs 5.88 Lakh Over Disclosure Lapses

1 min read     Updated on 06 Oct 2025, 06:33 PM
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Suketu GalaScanX News Team
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Overview

Fino Payments Bank has reached a settlement with SEBI, agreeing to pay Rs 5.88 lakh for disclosure violations related to fraudulent activities by its employees. The bank failed to make timely and complete disclosures about 15 complaints of fraudulent investment schemes, including not disclosing a KPMG investigation report within the required 24-hour timeframe. The settlement was made without admission or denial of findings, and SEBI has disposed of the adjudication proceedings initiated with a show cause notice dated October 8, 2024.

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*this image is generated using AI for illustrative purposes only.

Fino Payments Bank has reached a settlement with the Securities and Exchange Board of India (SEBI) regarding disclosure violations, agreeing to pay Rs 5.88 lakh to resolve the case. The settlement comes in response to the bank's failure to make timely and complete disclosures about fraudulent activities perpetrated by its employees.

Disclosure Violations

The case revolves around the bank's handling of 15 complaints alleging fraudulent investment schemes by its employees. Key points of the violation include:

  • Fino Payments Bank received an investigation report from KPMG on November 8, 2023.
  • The bank was required to disclose this information within 24 hours, by November 9, 2023.
  • The bank failed to make adequate and timely disclosure as mandated under LODR (Listing Obligations and Disclosure Requirements) Regulations.
  • Subsequent updates, as required by regulations, were also not provided.

Settlement Details

Aspect Detail
Settlement Amount Rs 5.88 lakh
Nature of Settlement Without admission or denial of findings
Original Proceedings Adjudication initiated with a show cause notice dated October 8, 2024
Case Disposition SEBI disposed of the adjudication proceedings following the settlement

Implications

This case highlights the importance of prompt and transparent disclosure practices for listed entities, especially in matters involving potential fraud or misconduct. It serves as a reminder for financial institutions to maintain rigorous compliance with SEBI's disclosure requirements to ensure market integrity and investor protection.

While the settlement allows Fino Payments Bank to resolve the issue without a formal admission of wrongdoing, it underscores the need for robust internal controls and reporting mechanisms to prevent such lapses in the future.

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Fino Payments Bank Reports 4% Revenue Growth Amid Regulatory Challenges and Business Shifts

2 min read     Updated on 06 Aug 2025, 01:05 PM
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Reviewed by
Jubin VergheseScanX News Team
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Overview

Fino Payments Bank Limited reported a 4% year-on-year revenue growth to ₹453.00 crores for Q1, with EBITDA increasing by 16% to ₹62.00 crores and cash profit growing by 20% to ₹50.50 crores. CASA accounts reached nearly 1.5 crores, and average deposits rose 34% year-on-year. The bank faced challenges including a decline in remittance business due to regulatory changes and concerns over fraudulent accounts. Despite these, digital payment services revenue grew 59% year-on-year. The bank has applied for a small finance bank license and is investing in technology upgrades, including core banking system migration and AI tools implementation.

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*this image is generated using AI for illustrative purposes only.

Fino Payments Bank Limited reported a 4% year-on-year revenue growth to ₹453.00 crores for Q1, despite facing industry-wide challenges and regulatory headwinds. The bank's EBITDA increased by 16% to ₹62.00 crores, while cash profit grew by 20% to ₹50.50 crores.

Key Highlights

  • CASA accounts reached nearly 1.5 crores with approximately 7 lakh new additions in Q1.
  • Average deposits rose 34% year-on-year to ₹2,275.00 crores.
  • Digital payment services revenue grew 59% year-on-year to ₹106.00 crores.
  • Net revenue margin expanded by 250 basis points year-on-year.

Business Transformation and Challenges

Rishi Gupta, Managing Director and CEO, highlighted the bank's strategic shift towards higher-margin products. The traditional cash transaction business, which previously contributed over one-third of revenue, now accounts for only one-fifth. This shift has led to improved net revenue margins.

However, the bank faced significant challenges:

  1. Remittance Business Decline: Regulatory changes introduced in November led to a sharp 60% industry-wide slowdown in remittance business.

  2. Mule Account Concerns: Enhanced regulatory scrutiny and a rise in fraudulent accounts led to a cautious approach in account additions and transaction volumes.

  3. Regulatory Compliance: The bank adopted a risk-calibrated growth strategy to ensure full compliance with new regulations, particularly in the remittance and digital payments sectors.

Digital Growth and Future Outlook

Despite challenges, Fino Payments Bank's digital segment showed strong growth:

  • Digital throughput crossed ₹67,800.00 crores, accounting for 55% of total throughput.
  • UPI transactions rose by 39% year-on-year to 97.9 crores.
  • The bank maintained a UPI market share of around 1.5%.

Gupta mentioned ongoing efforts to introduce new payment products and partnerships with leading payment aggregators in the second half of the fiscal year.

Small Finance Bank License Application

The bank has formally applied for a small finance bank license and is in ongoing discussions with regulators. Management expressed hope of starting lending operations within one year of receiving in-principle approval, if granted.

Technology Investments

Fino Payments Bank is in the final phase of core banking system migration, expected to be completed before the end of the calendar year. The bank is also investing in AI tools to enhance customer experience, improve fraud and risk management, and automate manual processes.

Outlook

While not providing specific guidance due to ongoing industry challenges, management expressed confidence in the bank's long-term strategy. They anticipate a more conducive environment for growth in the second half of the fiscal year, with a focus on maintaining elevated margins and bottom-line growth.

Ketan Merchant, CFO, stated, "We expect these enhanced margins to remain range bound around 33%, 34% for the next couple of quarters."

As Fino Payments Bank navigates through regulatory changes and evolving market dynamics, its focus on digital growth, operational efficiency, and potential evolution into a small finance bank positions it for future opportunities in the financial services sector.

Historical Stock Returns for Fino Payments Bank

1 Day5 Days1 Month6 Months1 Year5 Years
+3.75%+11.20%+12.48%+40.69%-23.83%-45.06%
Fino Payments Bank
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