Fino Payments Bank in Trouble
Fino Payments Bank is going through serious financial stress — its profits have fallen sharply and its CEO was arrested earlier this year. The bank is now trying to convert into a Small Finance Bank. If you have an account or use their services, here's what you need to know to keep your money safe and make smart decisions.
Many Indians in smaller towns use payments banks like Fino to send money home — some households rely on these transfers for monthly expenses of ₹5,000–₹15,000. A sudden disruption in such services can hit family budgets harder than a chai price hike.
Your deposits in any payments bank, including Fino, are insured up to ₹5 lakh under DICGC — but it is still wise to move your main savings to a full-service scheduled bank if you are worried about stability.
Key Takeaways
If you hold money in a Fino Payments Bank account, remember that payments banks can only hold up to ₹2 lakh per customer — your deposits up to ₹5 lakh are insured by DICGC, so check your balance and stay within insured limits for safety.
If you rely on Fino for domestic money transfers or micro-transactions, start identifying a backup option like India Post Payments Bank, a Jan Dhan account, or a UPI-linked savings account at a scheduled commercial bank.
Watch for RBI communications on Fino's Small Finance Bank conversion — if approved, account rules and interest rates will change, which could actually benefit you with higher FD rates and access to credit products.
Fino Payments Bank, one of India's better-known payments banks serving lakhs of customers in semi-urban and rural India, is going through its toughest phase yet. The bank's profits have declined sharply over the past year, and the arrest of its CEO earlier in 2025 added to the uncertainty. Now the bank is pursuing a licence to become a Small Finance Bank — a significant structural shift that every Fino customer should understand.
Payments banks in India are a special category created by the RBI to bring basic banking to the unbanked. They can accept deposits up to ₹2 lakh per customer, offer debit cards, and facilitate transfers — but they cannot give loans. This model works well when transaction volumes are high. But when the domestic money transfer business shrinks — as it has for Fino — the revenue base weakens fast.
For ordinary customers, the immediate concern is account safety. The good news is that the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures deposits up to ₹5 lakh per customer per bank. So if you have under ₹2 lakh in a Fino account, you are covered. That said, if you are using Fino as your primary banking channel, it is worth diversifying — open a savings account with a full-service bank or use India Post Payments Bank as a backup.
The move to become a Small Finance Bank, if approved by RBI, is actually a positive signal long-term. Small Finance Banks can offer loans, pay higher interest on fixed deposits, and serve a broader range of financial needs. Customers could eventually access credit products and better deposit rates. You can use GoCredit to compare deposit rates and loan offers across banks and find what works best for your financial goals.
Pro tip: Never keep your emergency fund or large savings in a payments bank alone. Use a scheduled commercial bank or Post Office savings scheme for any amount above ₹50,000 — and always check whether your bank is DICGC-insured before depositing.
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