Fino Payments Bank reports a 214% rise in referral loan disbursements in Q1 FY27, signalling a strategic shift towards becoming a small finance bank amid record margins and expanding customer base.
Fino Payments Bank reported a sharp rise in referral loan disbursements in the first quarter of FY27 as it pressed ahead with a strategic shift towards becoming a small finance bank. The lender said referral loan volumes climbed 214% year on year to ₹628 crore, placing the business at nearly half of its total FY26 disbursements. In its earnings call, management linked the performance to deeper partnerships with non-banking finance companies and the bank’s merchant-led distribution model, which has become central to its credit strategy.
The stronger lending momentum came alongside a record net revenue margin of 42.8%, up 275 basis points from the previous quarter and 925 basis points from a year earlier. The company also added 8.4 lakh new accounts in the quarter, taking its customer base to 1.83 crore, while digitally active customers increased 22% year on year to 64.6 lakh. Business Standard had already reported earlier this year that referral lending was gaining pace, with FY26 disbursements nearing ₹1,300 crore and Q4 volumes on track to close around ₹630 crore.
Even so, management described the quarter as one of the most difficult in the bank’s history. EBITDA fell to ₹43.1 crore from ₹56 crore in the previous quarter, as Fino paused its business-to-business UPI merchant payments offering for recalibration and continued to spend on technology and risk controls. Total throughput declined 10% year on year, reflecting both the temporary disruption in that business and broader pressure on traditional transaction revenue as more payments move from cash to UPI. The bank also said its business-to-business cash management segment is facing pricing pressure.
The main focus remains the transition to a small finance bank, which management said is still on schedule under Reserve Bank of India conditions. The bank has appointed PricewaterhouseCoopers for operational readiness and is building out its loan origination and management systems, with technology partners already in place. Interim chief executive Ketan Merchant said the current funding profile gives Fino a structural edge, pointing to a cost of funds of 1.4% and saying the planned secured lending book could support industry-leading margins. The bank also expects an additional ₹10 crore of transition-related expense this year, but said the longer-term payoff should come once the new model is fully operational.
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