According to The Hindu BusinessLine, Fino Payments Bank shares traded flat at ₹190.28 on NSE at 12:27 p.m. on Monday, recovering from a sharp intraday decline that saw the stock hit a 52-week low of ₹165.01 from the previous close of ₹192.19. The stock opened at ₹175 and moderated from ₹165.01 to ₹198.90 during the session, indicating a sharp intraday recovery amid heightened volatility. As per CNBC TV18, the stock had dropped as much as 9% on Friday before the recovery, with the stock trading at ₹191.84 in morning deals and down about 10.7% over the past one year. At current levels, the bank's market capitalisation remains at around ₹1,600 crore.
According to multiple stock exchange filings, Fino Payments Bank Ltd announced on Friday (February 27) that Managing Director and CEO Rishi Gupta has been arrested under the CGST Act 2017 and SGST Act 2017. The arrest was made under section 132(1)(a) and 132(1)(i) of the respective GST acts on February 27, 2026. As per The Hindu BusinessLine, the bank filed the disclosure on Monday clarifying that the alleged GST violations pertain to an investigation involving certain programme managers who maintain relationships with multiple banks, including Fino Payments Bank. The bank confirmed that neither Gupta nor the bank has any involvement in the business actions of the programme managers in question and has informed the RBI about the development. The Ground of Arrest against the CEO was issued on February 27, 2026 at 3:55 a.m. by the Directorate General of GST Intelligence (DGGI), the investigative arm of the Goods and Services Tax department, in Hyderabad. Latest reports indicate that the DGGI is investigating the use of alleged shell companies and payment aggregators to funnel illicit funds generated by online money gaming.
According to The Hindu BusinessLine, Fino Payments Bank has denied any GST evasion and rejected betting links following the CEO's arrest. The bank stated that "Investigation by the DGGI was in relation to the program manager(s) associated with multiple banks and not on the GST compliance of the bank itself, and the bank and its officials have nothing to do with the business/actions of the program manager(s) in question." The bank clarified that it does not directly or indirectly engage or promote any kind of betting activity through any forum, website, platform or in any form. Regarding merchant onboarding, the bank explained that "Onboarding is being done by the concerned business or relevant teams and not the MD & CEO of the bank. Further, as part of the onboarding checks, one of the preconditions is that the merchants referred by the program manager(s) need to have an existing banking relationship with other bank for facilitating the UPI transactions." The bank confirmed that it has not issued any alleged fake invoice, and all invoices issued are based on the services utilised by the program manager(s) or merchants.
According to The Hindu BusinessLine, Fino Payments Bank has reaffirmed its compliance with all GST regulations and emphasized its robust risk management framework. The bank stated that "Fino Payments Bank has not evaded any GST dues and remains compliant with all regulations relating to GST payments." It noted that the bank maintains a robust risk management framework for transaction monitoring of merchants using the Virtual Payments Address provided by it. The bank also clarified that it does not maintain current accounts of programme managers or merchants, and that funds received through the VPA handle are settled to the designated accounts of programme managers or merchants with the respective public or private sector banks. The company stated that its operations and business continue as usual and that it does not foresee any financial liability at this stage in relation to the matter.
According to The Hindu BusinessLine, industry bodies like the Payments Council of India (PCI) and Startup Policy Forum (SPF) came out in support of Rishi Gupta following the arrest. The PCI sought urgent intervention and called for greater proportionality in enforcement action, noting that "regulated financial institutions operate across complex networks of merchants, technology partners and business correspondents." PCI chairman Vishwas Patel stated that "We believe it is important for the industry to articulate concerns around proportionality and governance continuity when supervised institutions and their leadership are involved. We have placed these considerations before the Finance Minister in a spirit of constructive engagement." The Startup Policy Forum noted that several SPF members have raised concerns that such coercive actions against fintech founders, possibly at times stemming from business partners' alleged violations, could set a problematic precedent for the sector. Meanwhile, Finance Minister Nirmala Sitharaman, in a response to social media posts, has assured that the ministry would look into the matter.
Despite the leadership challenges, Fino Payments Bank recently achieved a significant milestone by receiving Reserve Bank of India's in-principle approval for conversion into a small finance bank, making it the first one among its peers to do so. As reported by The Hindu BusinessLine, the bank expressed confidence of completing the transition into a small finance bank within the stipulated 18-month timeline given by the RBI. The bank, which is the only publicly listed entity in payments bank space, is positioned to expand its lending capabilities once the conversion is complete. The RBI has given a timeline of 18 months to complete the conversion of the bank into a Small Finance Bank, and the management expects to complete the process before the stipulated timeline. The development comes a month after the Reserve Bank of India approved Gupta's reappointment as MD and CEO, highlighting the bank's recent regulatory approvals amid the current leadership challenges.