Fino Payments Bank Shares Surge Post SEBI Settlement, Management Downplays Impact

Fino Payments Bank saw its shares climb in early trading today, buoyed by the news of a settlement reached with the Securities and Exchange Board of India (SEBI). Despite the regulatory action, the bank's management has affirmed that the financial and operational impact of the settlement is negligible, a stance that appears to have reassured investors.

The stock gained over 1% on the National Stock Exchange (NSE) in Wednesday's session, hitting an intraday high of Rs 354.95, indicating a positive market reaction to the resolution of the regulatory overhang.

This rise suggests investor confidence in the bank's ability to navigate regulatory challenges without significant business disruption.

The settlement, which involved a payment of Rs 17.79 lakh, addresses alleged violations of certain regulatory norms. SEBI had previously issued a show-cause notice to Fino Payments Bank concerning alleged contraventions of the Payment and Settlement Systems Act, 2007, and the Payment Banks Operating Guidelines.

Specifically, the allegations pertained to the appointment of two independent directors without securing prior approval from the Reserve Bank of India (RBI).

Furthermore, the bank faced scrutiny for issuing an offer document for its Initial Public Offering (IPO) without obtaining specific RBI approval for one of the independent directors' appointments.

In a filing to the stock exchanges, Fino Payments Bank clarified, 'The bank, in order to settle the matter without admitting or denying the findings, proposed a settlement of the alleged violations through a settlement order.' The statement reiterated that the settlement amount is insignificant and will not materially affect the bank's operations or financial health.

This development is crucial for Fino Payments Bank as it removes a layer of regulatory uncertainty.

While the settlement brings closure to the past issues, the bank's proactive communication and downplaying of the impact seem to have resonated positively with the market, reflecting in its share performance. The bank continues to focus on its core operations, emphasizing its commitment to regulatory compliance and sustainable growth.