Gupta was arrested under section 132(1)(a) of the Central Goods and Services Tax (CGST) Act and section 132(1) (i) of the state GST Act
Fino’s board convened a special meeting to appoint CFO Ketan Mehta as the interim head of the company to oversee day-to-day operations in the absence of Gupta
The payments bank informed the bourses that it is actively taking measures to address and overcome the “situation”, adding that the arrest has no current impact on the bank
In a major development, Fino Payments Bank’s chief executive officer (CEO) Rishi Gupta was arrested today over allegations of tax evasion.
In a filing with the exchanges, the company said that Gupta was arrested under section 132(1)(a) of the Central Goods and Services Tax (CGST) Act and section 132(1) (i) of the state GST Act.
The former pertains to evasion of taxes due to supply of goods or services without issuing an invoice or issuing a false invoice. The latter relates to wrong Input Tax Credit (ITC) utilisation or wrongful refund exceeding ₹5 Cr. Both are punishable with imprisonment up to five years.
Meanwhile, the payments bank’s board convened a special meeting to appoint chief financial officer (CFO) Ketan Mehta as the interim head of the company to oversee day-to-day operations in the absence of Gupta.
“Investigation is relating to business partner(s) of the Bank and not relating to the GST compliance of the Bank. The Bank is co-operating with the authorities to provide all the necessary information,” said Fino Payments Bank in a filing with the exchanges.
The payments bank informed the bourses that it is actively taking measures to address and overcome the “situation”. It also claimed that the arrest has no current impact on the payments bank. The company also clarified that none of its other officials, except Gupta, were involved in the probe.
This is not the first time that Fino Payments Bank has landed in a controversy in the past year. In October 2025, markets regulator SEBI issued a show cause notice to the company over alleged delays and inadequacy in disclosing material events.
The matter pertained to Fino Payments Bank receiving 15 complaints alleging fraudulent investment schemes being run by its employees. Subsequently, KPMG was appointed to investigate the matter, and submitted its report in November 2023.
However, the company failed to make adequate disclosure within 24 hours and did not provide subsequent updates as mandated, as per SEBI. The payments bank eventually settled the case with SEBI last year by paying a settlement amount of ₹5.89 Lakh.
Besides, the RBI also imposed a penalty of ₹29.6 Lakh on Fino Payments Bank last year for non-compliance with certain directions on ‘licencing of payments banks’.
The controversies come as the payments bank is currently looking to transition to a small finance bank, for which it submitted its application to the RBI in January 2024. The RBI gave its in-principle nod to the company to convert into a small finance bank (SFB).
On the financial front, Fino Payments Bank’s net profit declined 47% to ₹12.3 Cr in Q3 FY26 from ₹23.1 Cr in the year-ago period. Meanwhile, total income for the quarter declined 15% YoY and 2% QoQ to ₹394.4 Cr.
Shares of the company closed Friday’s trading session 7.5% lower at ₹192.45 on the BSE.
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