Rishi Gupta, the chief executive officer of Fino Payments Bank Ltd., has been arrested in connection with an investigation into GST violations.
The arrest, executed on 27 February under Sections 132(1)(a) and 132(1)(i) of the CGST and SGST Act, 2017, pertains to an investigation involving Fino Payments Bank’s business partners rather than its own compliance, the lender said in a regulatory filing.
In an emergency board meeting concluded late Friday, the bank appointed Chief Financial Officer Ketan Merchant as “Head of the Organisation” to oversee day-to-day operations. The board stated Merchant will remain in the role until Gupta resumes office or further resolutions are made.
Fino sought to reassure investors, stating that no other bank officials are involved and that the probe has “presently no impact” on the bank’s operations.
“The bank is cooperating with 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 has been grappling with deteriorating financial metrics:
In the quarter ended December 31, 2025 (Q3 FY26), net profit nearly halved to ₹12.3 crore, down from ₹23.1 crore a year earlier. Total income for the same period fell 14.5% to ₹394.4 crore.
Despite the current headwinds, Fino recently received in-principle approval from the Reserve Bank of India to transition into a Small Finance Bank—a move intended to allow the firm to offer lending services and diversify its revenue base.