Aarin Capital cofounder Mohandas Pai took to X to question how the CEO of a regulated bank could be arrested for alleged GST evasion by a business partner
Finance minister Nirmala Sitharaman took cognisance of Pai’s tweet, assuring him that the ministry will look into the matter
Gupta was arrested by Hyderabad’s DGGI under provisions of CGST and GST Acts over allegations of tax evasion
Stakeholders of the startup ecosystem came out in solidarity with Fino Payments Bank’s MD and CEO Rishi Gupta after he was arrested yesterday over allegations of tax evasion.
Former Infosys CFO and Aarin Capital cofounder Mohandas Pai took to X to question how the CEO of a regulated bank could be arrested for alleged GST evasion by a business partner.
Notably, Fino Payments Bank said in a statement yesterday that the GST issue forming the basis of the charges against Gupta was related to one of the bank’s business partners. However, the bank did not disclose the name of the concerned partner.
Responding to Pai’s post, finance minister Nirmala Sitharaman said that the ministry will look into the matter. “Thanks for sharing this. Will check,” the finance minister said.
Following Sitharaman’s response, the Central Board of Indirect Taxes and Customs (CBIC) is likely to evaluate the matter and present a report to the finance ministry, NDTV Profit reported, citing sources.
Meanwhile, matchmaking platform Shaadi.com’s founder Anupam Mittal also raised concerns over alleged “overreach” by tax officials.
Fino Appoints Interim Head
Gupta was arrested by Hyderabad’s Directorate General of GST Intelligence (DGGI) under provisions of CGST and GST Acts. While Section 132(1)(a) of the CGST Act relates to supply of goods and services without issuing a viable invoice, Section 132(1)(i) of the GST Act pertains to wrong Input Tax Credit (ITC) utilisation or wrongful refund exceeding ₹5 Cr. Both Acts carry a five year prison sentence.
After the arrest, the bank appointed CFO Ketan Merchant as its interim head to look after day-to-day operations. In a statement, Merchant said Fino Payments Bank
has a robust governance and compliance framework, and the company or its CEO “have nothing to do with the actions of the business partners”.
The bank also noted that day-to-day operations have not been interrupted and no other Fino officials are involved in the probe.
Notably, the bank received in-principle approval from the Reserve Bank of India (RBI) to convert into a small finance bank (SFB) in December last year. Last month, the central bank approved the reappointment of Gupta as Fino Payments Bank’s MD and CEO for a period of three years, with effect from May 2, 2026.
Shares of the company closed Friday’s trading session 7.5% lower at ₹192.45 on the BSE.
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