Fino Payments Bank September Update: Loan Disbursals Surge 223% Despite 17% Dip in Account Openings

Market snapshot: Fino Payments Bank reported its September 2026 business performance update, highlighting strong traction in high-margin fee services and deposit accumulation despite a drop in new account acquisitions. Loan referral disbursals rose sharply by 223% YoY to ₹278 crore, while average total deposits grew 13% YoY to ₹2,794 crore.

Data Snapshot

• Loan referral disbursals surged 223% YoY to ₹278 crore in September 2026, compared to ₹86 crore in September 2025.
• Average total deposits grew 13% YoY to ₹2,794 crore in September 2026, up from ₹2,480 crore in September 2025.
• CASA renewal income increased 20% YoY to ₹28 crore in September 2026, compared to ₹23.3 crore in September 2025.
• New deposit accounts opened decreased 17% YoY to 2,44,763 accounts in September 2026, down from 2,94,846 in September 2025.

What's Changed

• Average total deposits dipped slightly month-on-month from ₹2,821 crore in August 2026 to ₹2,794 crore in September 2026, though maintaining a 13% YoY growth trend.
• Loan referral disbursals increased MoM to ₹278 crore from ₹243 crore in August 2026, accelerating their strong growth momentum.
• Renewal income recovered significantly to ₹28 crore from ₹22.8 crore in August 2026, returning to positive YoY territory at 20%.
• CASA base expanded to reach a milestone of 1.91 crore accounts, strengthening the bank's core liability franchise.

Key Takeaways

• Strong Deposit Resilience: Average total deposits rose 13% YoY to ₹2,794 crore, reflecting high customer retention despite a slower pace of new account acquisition.
• Surge in Credit Referral Monetization: Loan referral disbursals climbed 223% YoY to ₹278 crore, showcasing effective monetization of the bank's distribution network.
• Rising Renewal Streams: Renewal income grew 20% YoY to ₹28 crore, indicating stable recurring cash flows from the existing CASA customer base.
• Decline in Retail Transaction Volume: General transaction throughput dropped 10% YoY to ₹3,469 crore, indicating lower retail velocity, though CMS throughput partially compensated with a 10% YoY increase to ₹6,918 crore.

SAHI Perspective

Fino Payments Bank is exhibiting a typical maturation curve for a payments bank, prioritizing high-margin fee-based services over volume-heavy transaction throughput. The massive surge in loan referral disbursals and steady renewal income indicate that the customer base is highly sticky and ripe for cross-selling. As the bank continues its transition roadmap toward becoming a Small Finance Bank, this strategy improves its profitability margins and builds a robust lending-referral playbook before full-scale credit operations begin.

Market Implications

The operational update highlights a high-margin business mix transition that should protect profitability even amid topline transaction pressures. Higher renewal fees and credit referrals are margin-accretive, which is crucial for offsetting the 100% loss of B2B UPI P2M throughput and a 10% decline in transaction throughput. The market is likely to view the credit-referral momentum and stable deposit base positively as preparatory indicators for the Small Finance Bank transition.

Trading Signals

Market Bias: Bullish

Strong growth in high-margin verticals, led by a 223% YoY surge in loan referral disbursals to ₹278 crore and a 20% YoY rise in renewal income to ₹28 crore, offsets the 10% decline in transaction throughput. The stable 13% YoY growth in average deposits reinforces structural franchise health.

Overweight: Payments Banks, Private Sector Banks

Trigger Factors:

• Securing of regulatory clearance for Small Finance Bank license transition
• Sustained expansion of cash management services throughput past ₹7,000 crore
• Rebound in new deposit account openings above 2.5 lakh per month

Time Horizon: Medium-term (3-12 months)

Industry Context

Payments banks in India are increasingly focusing on financial product distribution (insurance, mutual funds, and loans) and cash management to bypass interest-margin restrictions. Fino’s shift toward loan referrals represents a scalable capital-light model that leverages its vast merchant network of over 20 lakh points. This model is highly relevant as competitors face severe pressure on UPI transaction monetization.

Key Risks to Watch

• Continued deceleration in new account openings (down 17% YoY) could shrink the top-of-funnel customer acquisition pipeline over the long term.
• Dependence on third-party lending partners for loan referral commission income, exposing the bank to partner-side credit policy shifts.
• Contraction in retail transaction throughput (down 10% YoY) might affect merchant ecosystem engagement levels.

Recent Developments

In September 2026, Fino Payments Bank was among the first acquirer banks to go live with NPCI's Aadhaar-enabled Payment System (AePS) three-party cash deposit (3PCD) service, which allows interoperable cash deposits at its outlets. In corporate governance, the bank's board extended the tenure of Interim CFO Anup Agarwal by up to 3 months starting October 6, 2026, and appointed new heads for the MSME and Branch Banking divisions in September 2026.

Closing Insight

Fino’s performance shows that a mature customer base can yield superior margins through cross-selling, even when new acquisition slows. Investors should monitor how well this high-margin model sustains as the bank prepares for its larger SFB conversion.

High Performance Trading with SAHI.