FINO Payments Bank Ltd (NSE: FINOPB) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Rishi Gupta — Managing Director and Chief Exrcutive Officer
Ketan Merchant — Chief Financial Officer
Anand Dama — Emkay Global Financial Services Limited
Analysts:
Unidentified Participant
Rashi Khatri — Analyst
Majid Ahmed — Analyst
Sanam Jhaveri — Analyst
Dhruv Shah — Analyst
Franklin Morris — Analyst
Manish Srivastava — Analyst
Rupesh Advani — Analyst
Presentation:
operator
Sam sa. Sa. Sat. Ladies and gentlemen, good evening and welcome to the Fino Payments Bank Q3FY26 earnings conference call hosted by Coindia Advisors. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Rashi Khatri from Go India Advice. Thank you. And over to you Ms. Khatri. Thank you, Swapnali.
Rashi Khatri — Analyst
Good afternoon everyone and welcome to the Q3 and 9M FY26 earnings call of Pinot Payments Bank. We have on call Mr. Rishi Gupta, Managing Director and Chief Executive Officer. Mr. Ketan Merchant, Chief Financial Officer and Mr. Anoop Agarwal, Head of Finance and Investor Relationship. We must remind you that the discussion on today’s call may include certain forward looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request the management to take us through the financials and the business outlook subsequent to which we will open the floor for Q and A.
Thank you. And over to you sir. Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we connect them back. Ladies and gentlemen, the line for the management has been connected over to you sir. Okay. Thank you Rashi. A warm welcome to all of you joining us today for our quarter three FY26 earnings call. I would like to begin by highlighting the most significant development till date during the period your bank received in principal approval from the Reserve bank of India to transition into a small finance bank making Pinot the first and the only payments bank to reach this milestone. This approval marks an important step in our journey and validates the work we have done over the last few years in building a compliant, scalable and resilient banking platform. On behalf of the entire management team I would like to thank the RBI Art Board, our employees, especially our shareholders for their continued support and confidence in Fino.
This development is a key inflection point as we position the franchise for its next phase of growth allowing us to deepen customer relationships and expand our role in advancing financial inclusion in reasonable, in responsible and sustainable manner. With SFB license we add multiple revenue streams to our existing business model. Over the first nine months of FY26 our focus have been very deliberate and consistent around quality over quantity. Whether it is merchant, public, partner, onboarding, deposit growth or client acquisition. We have consciously chosen to prioritize sustainability and scalability over short term volume led growth. This approach becomes especially critical as we enter the SFB transition because the foundation we built today will define the quality of balance sheet returns and risk profile over the coming years.
As we move closer to the SFB phase, your biggest bank strength is that we enter this journey with a strong CASA based liability of over 2,500 crores. Add to this with other bank Add to this deposits with other banks of about 500 crores means that we are sitting on nearly 3000 crore of low cost deposits. CASA for us is not merely a funding source, it is a strategic mode. It provides us with a structurally low and scalable cost of funds which has remained under 2% for over the nine months period. This gives us a strong structural advantage that allows us to design the lending.
Business. Very differently from many other SMBs. This low cost of funds will enable us to maintain nim of around 10% on a largely secured portfolio. This will be driven by products such as loans to msme, Affordable Home Loans, Lap Micro Labs and Select Gold loans. We will remain disciplined on loan to value ratios, customer selection and ticket sizes. This calibrated approach is deliberate and is aimed at ensuring predictable credit costs which we believe can be maintained sub 1% over a cycle as the loan book scales. From a medium term perspective as we transition into an sfb, our aspiration is to scale the business meaningfully while continuing to maintain discipline.
Our loan book aspiration is in the range of 8 to 10,000 crore by FY30 and this growth will be fast and prudent. We expect the credit deposit ratio to be around 75% in the initial 34 years. Over the medium term our aspiration is to build towards a 20% plus ROV driven by a low cost of funds, disciplined credit costs and operating leakage. Another important differentiator in our SFB journey is our merchant led ecosystem. Today we engage with over 20 lakh merchants which gives us a deep on ground footprint and a strong base to thoughtfully extend.
Our credit offering and drive are sourcing over time. This model allows us to operate with lower cost, lower acquisition cost, better customer insight and stronger engagement and collections and we believe it will continue to remain a key structural advantage as our business scales. In summary, our key differentiator will be merchant led asset light sourcing model that is non brink and motor and limited branches and asset center to complement our existing distribution network. We are not expecting to spend more than 15 crores on physical infrastructure on an annual basis on the Execution Front we have crossed a critical milestone on the technology side by going live on holodo core projects and migration of our core banking system to finicle.
While some stabilization is natural in any large migration, the heavy lifting is behind us. This provides us with a flexible and scalable technology backbone that allows us to launch products quickly, customize offerings and scale without proportionate increase in cost. Apart from the technology, we need to hire talent for the critical vertical which also resonates our DNA and continue to be differentiated. With this, the heavy lifting of the technology cost is over and we expect to build the additional technology stack for SAB with about 100 crores over the next one year. As we build the SFB we are equally and pushing more on our current business.
We expect the current business along with growth to contribute to about 75% of the overall revenue by FY30. In FY30 over the first nine months of FY26 we have continued to strengthen the quality of our customer base with CASA being the cornerstone of our strategy and the primary growth engine. During quarter three FY26 average deposits grew 32% a year on year basis to 2,496 crore, reflecting continued customer trust and deeper engagement. We added over 8.7 lakh accounts in this quarter taking the total number of accounts to 1.68 crores. More importantly, the focus has shifted from priori accounts acquisition to balance quality with the average CASA balance improving by around 9% year on year to 1314 rupees.
Digitally active customers grew 22% year on year to nearly 60 lakh customers with while renewal income grew 19% year on year to 57 crores, reinforcing stickiness and annuity potential. Digital engagement has continued to strengthen in this financial year. Digital throughput now accounts for approximately 56% of the total throughput with digital transaction count growing 17% year on year to more than 89 crores in quarter 3 FY26 in digital payment business, enhanced regulatory scrutiny across the ecosystem continue to impact throughput in this quarter as well. However, we are seeing early tailwinds in this business. Accordingly, we are also expanding our business reach through strategic tires with payment aggregators and payment gateway partners which we believe will support recovery led growth as the environment normalizes as on December 25th we had 347 active merchants in this segment compared to 175 in September 25th.
Coming to cash led business, CMS segment continues to see moderation in revenue due to pricing competition and structural shifts despite the sectoral headwinds we have seen a 3% quarter on quarter growth in the throughput traditional business comprising of remittance AEPs. Micro atmospheric saw a decline in revenue by 40% as the ecosystem moves towards digital channels. These products though continue to bring in footfall and remain a hook for our new potential Kasa customers. To summarize, quarter FY26 and the first nine months of financial have been about disciplined consolidation and preparation. We are seeing the benefits of strategy reflecting stronger casa, improving digital engagement, a healthier revenue mix, a resilient margins.
As we move forward our focus remains on building a differentiated, scalable and sustainable banking franchise that is well prepared for the SFB opportunity ahead. With this I will now hand over to Ketan to take you through the financial performance in more detail.
Ketan Merchant — Chief Financial Officer
Thank you Rishi and a good evening everyone. I’ll take you through the financial and operating highlights for third quarter and nine months ended FY26 as Rishi has already outlined, the operating environment during Q3 continued to reflect a broader industry transition particularly across transaction led business and digital. Against this backdrop our focus remains firmly on strengthening the core value drivers of franchise including customer engagement, disciplined cost management and readiness for the next phase of bank’s evolution. From a financial perspective, this consolidation phase has been about preserving earnings quality, improving the efficiency of operating model and ensuring the further incremental scale continues to translate into sustainable profitability.
During Q3 FY26 total throughput stood at approximately 1.18 lakh crores while the throughput for 9 month period reach 3.56 lakhs crores reflecting an 8% YoY growth. Within this CASA and digital activity continued to show healthy momentum. During nine month FY26 digital throughput increased by approximately 31% YoY taking the digital share of total throughput to 55% up materially from the prior year which was 46%. Over a nine month period digital throughput reached 1 96,740 crores reinforcing the structural shift towards scalable and account linked activity. This evolution is also reflected in the revenue mix. Higher margin business led by CASA and renewal led income streams now contribute approximately 41% of total revenue while the share of low margin volume intensive transaction business has declined to around 18%.
This improvement in mix has translated into meaningful expansion in margins. Importantly, these revenues are supported by recurring engagement, lower incremental servicing cost and operating leverage rather than pure transaction intensity resulting in greater sustainability and visibility of cash flows even in a volatile transaction environment. At the same time, legacy transaction segments continue to moderate broadly in line with industry trends. Overall the transaction business declined by 12% quarter on quarter and 40% YoY for Q3FY26 reflecting structural shift from cash based transactions to UPI coupled with lower DBT inflows. CMS throughput remain under pressure due to pricing competition take rate down to 0.16% as compared to 0.17% in Q2FY26 although volume increased sequentially by 3% to 18,850 crores.
Turning to financial performance, Q3FY26 revenue stood at 394.4 crores reflecting a sequential decline of 1% and a YoY decline of 15%. Revenue for 9 month FY26 declined to 1247.9 crores representing 8% y o wide decrease. Despite this due to margin expansion excluding one offs, the profitability remained resilient. EBITDA for Q3 FY26 stood at 63.9 crores with EBITDA margin improving to 16.2%. For nine month period EBITDA expanded to 187.1 crores with a margin expansion of over two hundred and forty basis points on a YOY basis. At the PBT And PAT level Q3FY26 PBT stood at 17.5 crores excluding one off which was 3.1 crores.
This was at 20.6 crores while PAT was at 12.2 crores. For nine month period PBT stood at approximately 63.3 crores including one off reflecting a 20% yoy decline. Operating expenses remain tightly controlled. OPEX for Q3FY26 stood at 84 crores while nine month OPEX increased by only 2% on a yoy basis to 261.3 crores. The cost to income ratio for the quarter stood at 33.1% reflecting a temporary revenue moderation by while underlying cost discipline remain intact. Now going towards segment very quickly. CASA revenues in Q3FY26 are at 162.8 crores reflecting a 17% yoy growth for a nine month period.
CASA revenue increased to 476.3 crores up by 22% yoy basis. Within this CASA renewal income increased to 174.9 crores in nine month FY26 from 133.9 crores in nine months period FY25 reflecting a 31% yoy growth while Q3FY26 renewals stood at 57% up by 19% on a yoy basis. Digital payment revenue for Q3FY26 stood at 62.7 crores reflecting a 43% y o wide decline driven by regulatory tightening and moderation in certain categories. For a 9 month period digital revenue was at 232.5 crores compared to 255.9 crores in 9 month FY25 representing a 9% YoY decline. Transaction led segment continued to reflect the broader industry transition.
Cms revenue in Q3FY26 were 29.6 crores declined by 27% while 9 months revenue stood at 94.9 crores reflecting a 22% yoy decline. MATM and AEPS revenue declined to 35.1 crores in Q3FY26, a 25% yoy decline while 9 month revenue stood at 117.4 crores lowered by 14% on yoy basis. Remittance revenues moderated to 34.3 crore in Q3FY26 reflecting a 50% yoy decline and to 120.8 crore for a 9 month period reflecting 57% yoy decline. Consistent with the reduced reliance on cash DMT flows as well as the ecosystem which we have mentioned in earlier calls. A key highlight of Q3 has been the continued improvement in revenue quality driven by the deliberate shift in mix.
Low margin transaction led business now contribute around 18% of total revenue while high margin business primary led by CASA contribute around 40%. This shift has driven a 5.4% or 540 basis points year on year increase in the net revenue margin. With this net revenue margin at 37.5% in Q3 as compared to 32.1% in Q3 last year. As a result, despite revenue moderation, profitability has remained resilient with Q3 EBITDA at 63.9 crores up 6% YoY and EBITDA margins improving to 16.2% compared to 13% in the previous year. On a nine month basis. EBITDA grew by 10% on a YoY basis to 187 crores reflecting disciplined execution and a better mix on SFB transition.
As Rishi has already outlined, we continue to make steady progress across people, technology, governance and operating readiness. Our cost of funds of 4% as reflected in slide 15 of our investor deck would be our key differentiator in SFB operations and thereby driving profitability. With this I now hand it over back to the moderator for any questions. Thank you.
Questions and Answers:
operator
Thank you very much. We Will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants. You may press star and one to ask a question. We have the first question from the line of Anand Dharma from MK Global. Please go ahead.
Anand Dama
Yeah. Hi sir. Thank you for the opportunity and congratulations for the license. Sir, my question was first related to our existing business where we are continuously seeing a downfall in our revenues. Because of the transaction banking business undergoing some stress. Our CML business also is down. So have we lost any bigger client over there because of the competition? If yes, if you can talk about which are the clients that we have lost. Is there any pipeline to acquire new customers over there? Secondly, my question is about the. In the presentation you’ve talked about that how you’re going to transit into SFP by 2030.
But then what’s the starting point for that transition? Whether we expect that to happen from FY28. By then we would be fully operational as an SFP. And if yes, how the run up is going to happen. You also talked about some overnight digital float of about 500 crores. If you can just explain what is that digital float that you’re talking about.
Rishi Gupta
Thank you. Thank you. Anand. Let me just go first question first on the CMS. Yes. I’ll just quote some numbers. Q3, our revenue is 29.6 crores and Q2 sequentially it was around 30.9 crores. So yes, it has indeed reduced on a sequential basis. However, as I mentioned in my commentary, it is more about the take rate, volume and throughput during the same period in fact has increased marginally by around 500 crores. So CMS A, we do not have any. While we have competition challenges, it is more about the take rates. We have not lost any kind of, you know, revenue partner which is coming across.
So trust that answers your CMS point. Your second one was regarding the SFB timelines, correct?
Anand Dama
Yes. Yes. And if you can just run us through like how the cost is going to be till FY28 when you basically start up. If you start from FY28.
Rishi Gupta
Okay, thank you. Firstly. Okay, so two aspects. Rishi mentioned it in his commentary as well. We have around hundred odd crores of incremental CapEx IT investment which would come through in year one, we approximately have incremental 15 odd crores of infrastructure CapEx which will come through. So these are the two CapEx. We need to be cognizant that a larger part of our business is not going to come through branches and we’ve done some technology spends already. So these are the two aspects in terms of capex which will come through in the coming year. When do we intend to operationalize it? As all of you guys are aware, it is a process.
RBI has given us 18 months period to implement the same. We are working towards this and somewhere we’re looking at the last quarter of this financial year if everything works right in terms of preparation and working with rpi. I did not write your third question.
Anand Dama
Yeah, so no problem. So I think you said that this year basically or FY27 fourth quarter is when you expect a final license to come back.
Rishi Gupta
Yeah, the in principal licenses come thereafter. It is a process that you know, we have to make some preparations and then work along with rbi. And, and you know, this is a time when we plan to operationalize it.
Anand Dama
Sure. And so FY28 is when you would. So first quarter of FY28 is when you would want to start a full fledged SFP where you start lending business. Right? Is that a correct?
Rishi Gupta
Yeah, yeah, that’s correct.
Anand Dama
And before that you will have to offload your BC business as well or like you can continue for a while, you can get an extension.
Rishi Gupta
Yes, that is the plan.
Anand Dama
Okay, sure. And if you can just run us through like you know how the FY28 would look like in terms of SFP business in terms of operational cost or bulk of the capex related cost and depreciation or people onboarding will be largely done in FY27 itself. So FY28 we have more of lending business coming through and the operational costs come down. If you can just take us through FY27 and FY28 how it should look like.
Rishi Gupta
No. So Anand, what we’ve essentially done, if you go to our SFP specific slides we have put how do we expect to grow our lending business and visa vis liabilities as well. Where do we intend to grow? How are we turning And I’ve also mentioned out what kind of preparation which we are doing as at the current stage. We’re not putting across an FY28 numbers but that is something which we’ll work through as well. However, our outline of our assets, liabilities, customer acquisition and more importantly the cost of funds, all, all have been, you know, articulated in the investor deck.
Anand Dama
Sure. But then.
operator
Sorry to interrupt. Anand, I would request you to kindly read our participants waiting for their turn.
Anand Dama
Yeah. Sir.
operator
Thank you. We have the next question from the line of Majid Ahmed from Pinpoint X Capital. Please go ahead Audible.
Majid Ahmed
Sir.
Rishi Gupta
Yes you are.
Majid Ahmed
Yes sir. Thank you for the opportunity. Sir. My first question is. You are entering the SFV space with 100% CASA funded balance sheet. Unlike most SFBs that had to build CASA post conversion, how does this structurally change your approach to loan pricing, risk appetite and growth sequencing compared to traditional SSPs.
Rishi Gupta
So thanks. It’s a very fair question. We start off and Rishi mentioned it as well, we start off with an opening balance of around 3,000 plus crores. And if you go to slide number 15, in terms of our current model itself, we are saying that we can have incremental 5000 crores. So with this, our distinct stated and this and our lean model, if you go to slide number 16, we made ourselves prepared or we’re preparing for a secured lending with the cost of funds advantage which we have. And I again draw back the attention to slide 15 where we’ve said approximately FY30.
We look at 13,300 crores of deposit at cost of funds of 3.9% as you were alluding. And if you go to slide number 16, the kind of products which we are looking at is affordable housing secured loans under MSME LAP Microlap Gold loan. So that will constitute the major part of our lending portfolio. And that along with this secured products we can maintain our profitability largely because of maybe around 300 basis points advantage which we have. We service any other SFB on cost of fund. So that is our thought process in terms of leveraging our opening balance and going for a quality secured lending book.
Majid Ahmed
Okay, Got it sir. And sir, most SSB had to clean up asset quality while building casa. So Fino is doing the reverse. How does the profile in the first three to five years? Can you come again with the question? Sir, most SSB has to clean up asset quality while building casa. So Fino is doing the reverse. How does this change the risk profile in the first three to five years?
Ketan Merchant
So it’s a very relevant question and it goes to the broad Genesis of the SFB also see as Ketan mentioned we are a liability first bank. So we’re not carrying any one is that our liability book is already there. Roughly 3000 crore compared to many. Compared to the rest of these who came 10 years back didn’t have any liability experience. We obviously don’t have a lending experience. So for us, the asset quality or the treadmill on which they were running is not there. So that is where we have mentioned in my. I mentioned in my own remarks also that we’ll build up a prudent book over a phased manner and more on the secured side so that our target is to keep the credit course around 1% and that is what our focus is.
Also. I hope that broadly answers your question that because we are not having any opening assets, neither we are running on a treadmill where we are growing at a particular phase, we will grow it slowly but our liability will be the driver for it.
Majid Ahmed
Got it. Sir, the final question from my session, what is the realistic timeline to meaningfully, meaningfully deploy capital into lending and start reflecting SSB level ROE and ROE in reported numbers and what ROA and ROE should we expect in the medium term? Sir.
Rishi Gupta
Hi Majid. Some of this I’ve attempted to Capture in slide 19 typically and I think Anand also asked this question. If we are looking at operations starting last quarter FY27 or first quarter FY28, so that’s where capital would be deployed. I also draw attention to our current network. We are adequately capitalized for first phase of growth. ROE we are looking at in midterm and that’s what we put it as phase one. On slide number 19 we’re looking at the 20% plus ROE which can come through. The reason which we’ve earlier articulated, both me and Rishi is the lean model and the cost of fund advantage which we carry across.
Majid Ahmed
Okay, thank you sir.
Rishi Gupta
Thank you.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions in the conference call, we request you to kindly limit your questions to per participant. If you have a follow up question, please rejoin the queue. Again, we have the next question from the line of Sanme Javeri from Fin Interest Capital. Please go ahead.
Sanam Jhaveri
Hi sir. Good afternoon. So I have a couple of questions. The first one being that what would be a medium term writing from the merchant side? And the second question is around the cost. I mean how should we look at the cost ratio now and in the coming quarters?
Rishi Gupta
So I presume you are asking this question in the context of the next couple of quarters, you know, as a payment bank. Fair enough, fair enough. Thank you. So as I mentioned in my earlier commentary, our margins are at historic high in terms of 37.5%. Now that is happening due to the change in the product mix. And earlier we mentioned our transaction old low margin Cash business is reducing and Now CASA contributes 41% of the margin. So from here on we can expect margins to be largely range bound in terms of next couple of quarters.
That also depends upon how our digital business, which is, which has been a bit benign over last quarter or so, how that recovers but largely we expect that to be range bound. Second question which we are coming across is in terms of cost. Yes, our cost will, you know with some challenges over our or some moderations over our transaction banking business, we’ve maintained a very high cost discipline in terms of last couple of quarters which is reflected in yoy numbers as well as sequential numbers. We will continue to do that. In terms of our OPEX cost management there might be some incremental depreciation which we are expecting as we just completed our Cylinical project as well and as we mentioned mentioned it earlier.
So other than that I think the cost should, you know, be a trend line with operating efficiencies will continue.
Sanam Jhaveri
Any numbers that we can assume or we can estimate?
Rishi Gupta
No, as I said we’ve not given an estimate for the next year but I have given the drivers how it will all work across as well. Margins, I’ve mentioned it. Range bound cost will be trading currently and on the basis of the current trend line plus the incremental depreciation which we have.
Sanam Jhaveri
Okay. And so just one last question if I can squeeze in, if you could just give a breakup on how do we see a loan book shaping in terms of our product mix or sourcing channels and year? Well.
Rishi Gupta
Yeah, I think again if I go back while we have put the products which we are going across, as Rishi mentioned, we are a liability first bank which we want to put across there. We’ve had some more details coming across how much would be low cost liabilities at 1.7% which is more than 60% of our portfolio in terms of products which we have identified, how do we build that product and what will be the percentage is something which will evolve over next quarter or two. However, the point to emphasize which we are very clear is we are not going to go rampage.
We are going to take a very phased and cautious approach in building our affordable housing secured loan, MSME Lab, Micro Lab Gold loan and in certain cases personal.
Sanam Jhaveri
Yeah, that’s helpful. Thank you so much for wishing you all the best.
Rishi Gupta
Thank you very much.
operator
Thank you. We have the next question from the line of Dhruv Shah from Ambika Pen Capital. Please go ahead.
Dhruv Shah
Yeah. Hi team. First of all congratulations on getting in principle approval for small finance bank Rishi, my question pertains to your digital. Should we see 62 crores as your base now?
Rishi Gupta
And hopefully true, you need to be slightly louder unfortunately.
Dhruv Shah
Can you hear me now?
Rishi Gupta
Now it is better.
Dhruv Shah
Yeah. First of all, congratulations on getting the approval. It was Harvard. My first question is pertaining to your digital revenue. When do we start seeing growth here? Because this year we have seen sharp degrowth. But can we now see because your UPI contribution has also come down from the highs of 1.62% to now 1.41%. When do you see this stabilizing and growing?
Ketan Merchant
So both of them are related in a way because the digital payment business from a high of 11,000 crores per quarter to four and a half thousand crores per quarter has resulted in the degrowth of that UPI share also. See, Let me just try to explain. You see, there is no challenge as far as the growth is concerned. We have the railroads, we have the partners. There are enough and more merchants which are there in the market. Enough and more use cases are also building up on the UPI side. Last year because of the real money gaming ban, there was some drop which happened on account of some merchants as such, but our volume was not very high.
But more importantly, what is happening is that the increased scrutiny which we have to do from LEA point of view, the regulator point of view is affecting the onboarding of merchants. One is that it slows down the onboarding. Secondly, the merchant themselves, the number of merchants which we can onboard also comes, comes down because we have to check now multiple things before we onboard. So in the last one year there has been a big transition in terms of the entire regulation monitoring onboarding for merchants for digital payments. And you can understand there is so much of focus from the PMO, the Ministry of Office, the LEAs, the regulator on the cyber digital frauds which are happening.
So that is where we have been. Not only we largely every bank has slowed down this business just to have a better check and control in terms of the onboarding and the monitoring of transactions. So we believe that this, this kind of. While we were expecting that this number would be better from September, if you see I mentioned also the number of merchants have gone up. We should continue to see growth on this business. But large part of it depends on the directions which we get from the LEAs, the I4C and the regulator. So while business opportunity is there and from a technology and other points, we are all geared up to do double, triple the numbers which we have done in this quarter.
But because of the heightened scrutiny which is there and the direction which we have from the regulator, we have kept it benign on this. As of now, we’ll have to see how the environment changes and accordingly we’ll have to take a call on it. So it’s more of a cautious approach which we mentioned. But to counter this, what we have also started to do, there have been recent guidelines which have come from RBI, as recent as in November 25 which talks about onboarding of PAPG platforms. So as I mentioned also we are now pushing more on PAPG platforms or PAPG companies.
But the revenue margins in that is very low compared to a program manager kind of a platform. So it’s a calibrated approach which Ketan also mentioned.
Dhruv Shah
Right. Thank you for this answer, Rishi. Just next question. On the higher base of your CASA till 2030, I’m assuming you have projected a 30% CAGR of CASA growth. Do you think it’s possible at 1.7%? Because then now all the banks are also coming down. I understand that you have a unique proposition, but then on a higher base growing at 30% CASA, because your whole thesis of low funding depends on your CASA growth of 30%. Right?
Ketan Merchant
It’s a very valid question. In fact, we debated quite a bit internally on this point. See what the kind of customers which continue to get in a payments bank are largely transactional people who open bank accounts with us for transaction purposes. So they are nearly not looking at what is the rate of interest they are getting on a savings bank account. So they keep about 2, 3000, 4000 rupees of deposit. People who have higher deposits definitely look at a higher rate of interest. So the model in which we are building it up to one lakh of rupees, we will keep the same rate of interest which is there currently above one lakh of rupees, which means we move up from this customer segment to a higher customer segment which may not be running into lakhs like we add about 30, 35 lakh customers a year will be not of that level, will be a much lower level will be people who will give more than one lakh rupees of balance.
So the moment they give more than 1 lakh, I can offer them a FD kind of a saving bank account. So I don’t need to change my current less than 1 lakh rupees rate of interest. I hope it kinds of explains the strategy which we are working on.
Dhruv Shah
Right.
Rishi Gupta
Is it clear or is it.
Dhruv Shah
Yeah, I understood, I understood. Basically our average Deposit per customer has to go up going forward. That’s, that’s the main takeaway.
Ketan Merchant
If you look at the build up also in the slide number 15. Correct first 63, 70300 crores comes from the payments bank current ecosystem or around that. The balance comes at 6.6%. So the 6.6% is a mix of deposits of more than 1 lakh rupees, FDs, some wholesale deposits, all of that put together.
Dhruv Shah
And Rishi, on the lending front you mentioned that 90% you want to grow secured. But we have done some pilots. But what’s the feedback on those pilots? And can you just elaborate by FY28, the first year, how do you want to ramp it up to 10,000 by FY 2030?
Ketan Merchant
See we have done pilots. So two, three things which we are working on. One is our gold loan numbers. So total numbers is roughly about 350. No, no. 350 crores. 350 crores. So we, we did about 350 crores of disbursements in quarter three, which is our highest disbursement on referral product till date of which I would say 95% or so would be gold loan around 5 to 7% which we have built up a team of about 30 people working in some, some states in the country where they are building up a affordable housing lab kind of a product so they could reach a disbursement from 0 to 8 crores in 3, 3 to 4 months.
I think we did about 8 crores or so of disbursements in quarter in December of, of quarter three. So both the pilots, I would say both on the gold loan which has been there where we totally have reached 350 crores, I think it’s going very well. So on an average you can say affordable housing lab employee is able to generate 30 lakh rupees of new leads which is converted into disbursements per month which to my understanding is a healthy growth as such.
Dhruv Shah
Fair enough, fair enough. Rishi. Great, great. Thank you so much and all the best.
Ketan Merchant
Thank you.
operator
Thank you. We have the next question from the line of Franklin Morris from Reliance General Insurance. Please go ahead.
Franklin Morris
Yeah, thanks for taking my question. So currently we have a subscription based CASA model. So will we continue to have that model post the SFD as well?
Ketan Merchant
Yeah, yeah, absolutely. That thing changes.
Franklin Morris
Okay. Okay. And in terms of, in terms of the LCR estimate. So basically you know there is a higher stand runoff rate for CASA account vis a vis a term deposit. And also the fact that if it is digitally acquired, there is a higher runoff. So LCR to that extent, you know, tends to come lower. So considering the fact that we will have a high proportion of both these in our overall, you know, liability mix, what is the kind of LCR that we have pegged in our estimate?
Rishi Gupta
So thanks, this is a fair question. What we need to be cognizant and comes back to the slide number 15. We are running a current model where our while we only have CASA and our core book of CASA which is a non volatile CASA is to the extent of around 90% plus. So what you essentially said the volatility which can impact SIARC is more attributable to different segment for us. And as Rishi said earlier to Dhruv’s question, we are continuing our current model of acquisition of the subscription base, etc. So we do not expect that kind of volatility coming across.
This will be relatively higher. Core percentage of CASA is what we are looking at. And that is not out of the blue. That is the demographics of our current customer which we will continue doing.
Franklin Morris
But any LCR number that we would.
Rishi Gupta
No, we’ve not projected that currently the way it is there. But. But I just explained you the logic of how it will be core.
Ketan Merchant
Okay, okay. And finally just to understand like in the interim our cost to income ratio would tend to increase before it starts moderating as you go forward. Right. So right now like our cost income ratio is about 94%. So I just wanted to understand what’s the trajectory of this cost income ratio maybe in the next, you know, three to four years.
Franklin Morris
So again this comes back someone, perhaps Majid also had a similar point earlier as well. Maybe that was pertaining to how the cost is going for next year. I had explained that off if you see our. And Rishi mentioned in his commentary as well that if our cost of funds is around 3.9% and our margin is around 10% we are not going to go via a branch model or we will have limited and selective branches coming across. So we do not expect an abnormally high OPEX coming on account of sfb. How do we draw out a model in terms of profitability for three to four years? Currently as I said, we put margins, we put assets, we put liabilities.
We’ve also corroborated the incremental, incremental capex which is essentially coming across. So that’s where it will come through.
Franklin Morris
Fair enough, fair enough. Thanks a lot.
Rishi Gupta
Thank you.
operator
A reminder to all the participants, kindly restrict your questions to two Per participant. If you have a follow up question, please rejoin the queue. Again we have the next question from the line of Manish Srivastava from Infinity Alternative. Please go ahead.
Manish Srivastava
Hello.
Rishi Gupta
Hi Manish.
Manish Srivastava
Hello. Hi. Am I audible?
Ketan Merchant
Yeah, yeah. Loud and clear.
Manish Srivastava
Yes. Sorry, I didn’t want to be that long. Thanks. Thanks a lot for the call. I just wanted to understand like it seems to be a very tight market for people. How are we shaping up in terms of hiring plan for next? How is the market?
Rishi Gupta
Earlier you were extra loud and clear and now you are.
Ketan Merchant
But I understood your question. You’re basically asking in terms of how is the hiring going on. And look, see fortunately for us that we are sitting in Mumbai which is a financial hub of the country where most of the banks, NBFCs, fintechs are there. And so there is enough and more people who are in the same city. So we don’t have challenge of getting people from a different city. Secondly, because we are building up this business from ground zero on the asset side, there are a lot of interest which we are getting from relatively experienced people who want to be part of this journey of building up a bank where they see that overall contribution to overall contribution from their side will be enormously much bigger and very different to look at it.
So right now, key roles which we are looking at most of them we have already done multiple interviews. There is already a short list of employees which is there. So over the next one to two months we plan to close the top level of hiring and then the hiring will actually go down as they keep on joining. So the challenge on hiring I don’t see there is much on that side. Obviously we have to build up a cohesive team where the culture of the DNA of the company is maintained and grow with the new people.
So that part we are also working parallelly. So from a project implementation point of view, I think lot of work has started to happen and we see that momentum getting built over the next 60 days as we go into the journey.
Manish Srivastava
Fantastic. Thanks a lot and best wishes for everyone.
Ketan Merchant
Thank you. Manish.
operator
A reminder to all the participants, due to time constraint, we will restrict to one question per participant. We have the next question from the line of harsh. An individual investor. Please go ahead.
Unidentified Participant
Oh, hello. Am I audible?
Rishi Gupta
Yes, please.
Unidentified Participant
Yeah. So I just wanted to understand. So you mentioned majority of our lending will also happen through our merchants. Right. I just wanted to understand how that model shapes up. Like how do you plan to implement checks and balances when you’re lending through merchants?
Ketan Merchant
Great question. It Will require a lot of time for me to explain, but I will just give you a high level thing. Probably we can meet and then we can discuss this in detail. So largely what will happen is that we have a large merchant ecosystem across the country. These are merchants who are sitting in those local shopping areas and local plazas which are there in any semi urban, rural or metros or around the towns which are there. These are people who are well connected in the ecosystem and these are people who are aware of what is the economic activity happening around them in that geography.
So they will be able to generate leads for us. Once the lead will come, the lead will go through. And we are also, as I mentioned in my last call, we are also using lot of AI and fortunately for us, as we move into more, much deeper technology, the AI will definitely benefit us. We have in fact shortlisted about 8 to 9 partners already on the AI integrations which we have to do starting from getting the basic information, the photograph, the personal discussion and lot of other activities from that. So lot of that P part we expect the merchant will be able to do where there is like an idiot proof kind of ecosystem.
Once that is done, it will go to our asset centers which will be positioned in kind of a hub model. And from there whatever physical verification or anything will be required to be done will be done by our own staff. And obviously there will be lawyers and legal counsels who will help on the validation, verification, specifically on the housing kind of loan structure. So lead generation, collection of the basic information decisioning and everything will be at the hub level and the central office level. Obviously we’ll have to make some rules engines on which the entire ecosystem will work.
But the large part of the leads we expect to get generated through our merchant ecosystem and fulfillment through our asset centers and through that ecosystem. I hope it clarifies at a high level. Obviously this is a much deeper process flow and everything which will require a lot of time.
Unidentified Participant
Yeah, yeah, understood, thank you for that. And just a small clarification, so in terms of our referral loans, right there is no, we are not taking any.
Ketan Merchant
So if I get your question, no, we are not taking any credit risk. As a payments bank, we can’t take any credit risk. We refer it to the relevant partners and then they take the risk. Gold is a very operational kind of a model. I think affordable loans and lab are more where they have to take them, take a much, much more informed decision.
Unidentified Participant
And will this referral business continue as. We transition between harsh.
operator
I would request you to rejoin the queue Again as there are participants in the queue.
Unidentified Participant
Sure.
Ketan Merchant
Thank you Ash.
operator
Thank you. We have the next question from the line of Rupesh Advani from Nayanimwala Securities Private Limited. Please go ahead.
Rupesh Advani
Hi sir. Am I audible?
Ketan Merchant
Yes.
Rupesh Advani
Hi sir. Congratulations on the SSB bank license. I just had one small question on the CASA related revenue. Now you said that you have. There’s a. There’s an increase in the renewal income on a year on year basis. But if I look at it on a quarter on quarter basis it has come down by somewhere around 8%. So is there a specific reason behind that or something if you could explain.
Rishi Gupta
Yeah, hi. Yes, your observation is right. Typically renewal income is like an annuity income which is, you know, building and helping us. And we quoted a YoY percentage for three months for the quarter as well as nine months to address your point. I think our Q2 revenue was 62 crores which has come down to 57 crores. That is largely attributable to the DBT related aspects, direct benefits transfer. So when the direct benefit transfer which came essentially from the government had reduced significantly from quarter two to quarter three and that’s the trend which is showing across as well.
Rupesh Advani
Okay, so great. And just one last question if I may squeeze in. Will we be focusing on any particular demographic for the loan book or is it something that you haven’t yet decided for the sfp?
Ketan Merchant
Yeah, largely we have looked at north to west and one or two states in south to start with.
Rupesh Advani
Okay. Okay, so that’s all from my side. Thank you and all the best.
Rishi Gupta
Thank you Nayan.
operator
Thank you. Thank you. Ladies and gentlemen, due to time constraint, that will be the last question for today. I now hand the conference over to the management for the closing comments.
Ketan Merchant
Thank you. Thank you Rashi for the conference. So this quarter has been a remarkable quarter. I would say from a long term transition point of view of the bank. We achieved two significant milestones. One on the sfb, second on the technology which sets us apart compared to any other payments bank and other SFB in the same domain. Our SFB as we explained and lot of it is there in the presentation we would encourage. If there are more questions please, we’ll be more than happy to answer that on one to one basis to explain the entire thinking of our business model on the SFB side on technology, we have migrated to the new platform and we are expecting that the benefits of migration to a new next generation platform will start coming in from the next quarter onwards as, as we move into this in a more stable and complete our other pending jobs on the entire platform as such so lot of activities have happened there has been a slight drop as we saw in our business and the profitability there is a one off item on the labor cost also which also affected our bottom line but in the long term point of view we expect that with this big two transitions which we are now done with this will take us to a different level in the next one or two years and we continue to remain focused on what we want to build over the next 12 to 18 months and hopefully we will build up a very differentiated bank according to the things which we are content which we have contemplated and we are building on it and we continue to look forward to your continued support.
Thank you very much and have a nice day.
operator
Thank you thank you very much on behalf of Fino Payments bank and Goindia Advices. That concludes this conference. Thank you for joining with us today and you may now disconnect your lines.