Fino Payments Bank announced on Thursday that its board has accepted the early retirement request of Managing Director and Chief Executive Officer Rishi Gupta, according to an exchange filing. The company stated that Gupta will cease to be the MD & CEO of the bank, marking the end of his tenure with the financial institution. Gupta, one of the founding members of Fino, has indicated he wants to explore new avenues outside the lender, without disclosing further details about his future plans. The lender, however, did not specify the detailed reasons behind Gupta's early retirement request in the disclosure, though the timing comes months after his arrest in a GST-related case. Gupta, one of the founding members of Fino, was subsequently granted bail on March 26 after his arrest on February 27 in an investigation related to alleged fake goods and services tax invoices by a business partner of Fino causing loss of income for the government. The company had earlier clarified that Gupta's arrest was linked to an investigation involving its business partners and was not related to the bank's own GST compliance.
As reported by the company, an internal review conducted by the board did not indicate any prima facie case against Gupta. The bank stated in its filing to stock exchanges that 'Based on the information available with the Bank as of date, the Board believes that no prima facie case may be made out against Mr. Rishi Gupta.' The board also reviewed legal material and still considered him 'fit and proper' for the role, providing some clarity regarding the circumstances surrounding his departure. However, the board had kept the process of Gupta's reappointment on hold until a reassessment on his role in the GST case, even as it promptly accepted his resignation on May 21. The board's decision came despite Gupta's voluntary early retirement request, with the company noting that he will cease to be a key managerial personnel (KMP) and senior managerial personnel (SMP) of the company.
To ensure smooth transition during the leadership change, the board approved several continuity measures. According to the exchange filing, Interim Chief Executive Officer Ketan Merchant has been granted a three-month extension to continue in his role, effective from May 21, 2026, subject to RBI approval. Additionally, Interim Chief Financial Officer Anup Agarwal's tenure has also been extended by another three months, effective from July 2026. The interim arrangements are aimed at ensuring smooth functioning of the organisation until a long-term leadership structure is finalised. As per the latest reports, Merchant's tenure extension was approved for a period of three months until July 2026, with the board receiving legal opinions and reports in connection with the DGGI probe during its May 21 meeting.
The leadership transition comes amid ongoing regulatory scrutiny following Gupta's arrest in a significant GST investigation. The Hyderabad unit of the DGGI arrested Gupta in February in connection with a GST investigation into alleged online betting-linked tax evasion of over ₹840 crore. The DGGI has alleged that Gupta was a part of a syndicate that channelled funds from illegal online gaming platforms through shell entities and programme managers. However, Fino claims that the probe pertains to programme managers from various banks and has nothing to do with the payments bank's GST compliance. Following Gupta's arrest, Fino had appointed CFO Ketan Merchant as interim CEO and set up a committee of senior executives and board members to oversee operations. A special judge for trial of economic offences cases, Hyderabad, granted bail to Gupta in March after the Telangana High Court dismissed his writ petition seeking bail.
The regulatory developments have significantly impacted Fino Payments Bank's stock performance, reflecting investor concerns about the leadership transition and ongoing investigations. Fino shares have declined nearly 43% in the past three months, while the shares are down more than 53% on a year-to-date basis. The stock closed yesterday's trading session 0.41% lower at ₹120.95 on the BSE. The downward trajectory reflects investor concerns about the regulatory clampdown and uncertainty surrounding the bank's leadership transition. Despite the market pressure, the company maintains that its operations remain stable and there will be no impact on its services, with the bank continuing to work towards operationalisation of the small finance bank licence within stipulated timelines.
