Fino Payments Bank Ltd Chief Executive Officer Rishi Gupta has been arrested in connection with the investigation into GST violations.
The arrest, made on February 27 under sections 132(1)(a) and 132(1)(i) of the CGST and SGST Act, 2017, pertains to an investigation involving business partners of Fino Payments Bank rather than its own compliance, the lender said in a regulatory filing.
In an emergency board meeting concluded late Friday night, the bank appointed Chief Financial Officer Ketan Merchant as the “head of the organization” to oversee day-to-day operations. The board said Merchant will remain in the position until Gupta assumes office again or a further resolution is reached.
Fino sought to reassure investors, saying no other bank officials were involved and the investigation has “no current impact” on the bank’s operations.
“The bank is cooperating with the authorities to provide all necessary information,” the company said in the filing.
The legal challenge comes at a sensitive time for the Mumbai-based lender, which is grappling with deteriorating financial metrics:
In the quarter ending December 31, 2025 (Q3 FY26), net profit almost halved ₹below 12.3 crores ₹23.1 crore a year ago. Total revenue fell 14.5% for the same period ₹394.4 crores.
Despite the current headwinds, Fino recently received in-principle approval from the Reserve Bank of India for transformation into a small finance bank – a move aimed at allowing the firm to provide loan services and diversify its revenue base.