Fino Payments Bank CEO Arrested in GST Probe

In a major development for India’s banking sector, Rishi Gupta, Managing Director and CEO of Fino Payments Bank, was arrested on February 27, 2026, by the Directorate General of GST Intelligence (DGGI), Hyderabad unit. The arrest, carried out in Mumbai around 3:55 AM, relates to alleged violations under Section 132(1)(a) of the CGST Act and Section 132(1)(i) of the SGST Act, concerning tax evasion and supply of services without proper invoicing.

The bank clarified that the investigation is related to a business partner and is not connected to the company’s own GST compliance. The lender further stated that it is taking appropriate steps to address the situation and manage any operational impact arising from the case. 

Investigators reportedly link the case to a ₹13,000 crore online betting and gaming network, where nearly ₹3,000 crore in suspected betting funds were allegedly routed through banking and digital payment channels using dummy merchant accounts. Authorities are examining whether third-party service providers connected to the bank facilitated these transactions.

Fino Payments Bank, in a regulatory filing to BSE and NSE, clarified that the investigation pertains to certain API and technology partners—not the bank’s internal GST compliance framework. The lender emphasized full cooperation with authorities and stated that no other senior officials are implicated.

Following an emergency board meeting, CFO Ketan Merchant has been appointed Head of the Organisation to manage daily operations during Gupta’s absence.

The development triggered an immediate market reaction, with Fino’s shares falling 7.5% to ₹192.45 on the BSE.

The arrest comes at a sensitive juncture, as the bank recently received RBI’s in-principle approval to transition into a Small Finance Bank—an upgrade that would allow it to expand into lending operations. Industry observers have raised concerns over potential regulatory overreach, given that the alleged irregularities are said to involve external partners rather than core banking processes.