Fino Bank CEO Rishi Gupta Arrested for GST Violations; CFO Takes Charge
Fino Payments Bank MD and CEO Rishi Gupta was arrested on February 27, 2026, under the CGST and SGST Acts. The bank has clarified that the investigation pertains to business partners, not its own GST compliance. Chief Financial Officer Ketan Merchant has been appointed as interim head to oversee daily operations.
Key Highlights
- Fino Bank CEO Rishi Gupta arrested under GST laws.
- Investigation concerns business partners, not bank's GST compliance.
- CFO Ketan Merchant appointed as interim head.
- Bank assures no immediate impact on operations.
- Arrest made under CGST and SGST Act provisions.
- Rishi Gupta's re-appointment was recently approved by the board.
Rishi Gupta, the Managing Director and Chief Executive Officer of Fino Payments Bank, was arrested on February 27, 2026, under the provisions of the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) Acts. The arrest was made by the Directorate General of GST Intelligence (DGGI) in Hyderabad. The bank, in an exchange filing, clarified that the investigation is related to the bank's business partners and not its own GST compliance. Sources indicate that the matter might be related to fake invoices that led to a loss of government revenue.
Following Gupta's arrest, Fino Payments Bank convened an emergency Board meeting on the same day. During this meeting, the board appointed Ketan Merchant, the Chief Financial Officer (CFO), as the interim head of the organization to oversee day-to-day operations. Merchant will continue in this role until the leadership issue is resolved by the board or Gupta resumes his duties.
The bank has assured the public and its stakeholders that there is currently no impact on its operations or financial standing. It has further stated that it is cooperating fully with the authorities and providing all necessary information. Any future material developments will be disclosed to the stock exchanges.
Rishi Gupta, with over 30 years of experience in financial services, has been instrumental in Fino Payments Bank's growth, including its transformation journey and becoming the first payments bank to list on stock exchanges. Notably, the bank had recently received 'in-principle' approval from the Reserve Bank of India (RBI) for conversion into a Small Finance Bank, a significant milestone. Furthermore, the bank's board had also approved a postal ballot for Gupta's re-appointment as MD & CEO for a three-year term starting May 2026, subject to shareholder and RBI approvals. The RBI had already granted its approval for his re-appointment earlier in January 2026.
The news of Gupta's arrest has caused some shockwaves in the banking and professional circles, especially given the recent regulatory approvals for his leadership. Fino Payments Bank's stock experienced a decline of approximately 7.5% on the BSE following the announcement of Gupta's arrest.
This incident highlights the complexities of regulatory compliance within the financial sector and the potential implications for leadership during such investigations. The bank's proactive steps in appointing an interim head and its assurance of operational continuity aim to mitigate immediate concerns. The ongoing investigation into the business partners' activities and its potential ramifications for Fino Payments Bank will be closely watched by investors and the industry.
Frequently Asked Questions
Who is Rishi Gupta?
Rishi Gupta is the Managing Director and CEO of Fino Payments Bank. He has over 30 years of experience in the financial services sector and has been instrumental in the bank's growth and transformation.
Why was Rishi Gupta arrested?
Rishi Gupta was arrested under the provisions of the CGST and SGST Acts. The investigation reportedly relates to the bank's business partners and not directly to Fino Payments Bank's GST compliance.
Who has taken charge of Fino Payments Bank after Rishi Gupta's arrest?
Ketan Merchant, the Chief Financial Officer (CFO) of Fino Payments Bank, has been appointed as the interim head to oversee day-to-day operations in Rishi Gupta's absence.
Has Fino Payments Bank been impacted by the arrest?
The bank has stated that there is currently no impact on its operations or financial standing and that it is cooperating with the authorities. It has assured that further disclosures will be made if any impact arises.