India, Dec. 5 -- Fino Payments Bank has received in-principle approval from the Reserve Bank of India (RBI) to convert into a small finance bank (SFB).

Under RBI's "on-tap" licensing rules, a payments bank run by resident promoters and with at least five years of operations can apply for SFB status. Fino met these conditions, and the central bank evaluated its application under the standard procedure laid out in the guidelines.

However, the approval does not immediately make Fino an SFB. The bank must now complete all regulatory requirements before the RBI issues a final licence.

Notably, Fino applied for the SFB licence in January last year. The regulatory clearance comes after a year marked by multiple compliance actions against the ...