Rishi Gupta, the Managing Director and CEO of Fino Payments Bank, was arrested by the Directorate General of GST Intelligence (DGGI), Hyderabad unit, in connection with an alleged ₹13,000 crore online betting-linked GST evasion case.
The arrest took place in Mumbai at approximately 3:55 AM under Sections 132(1)(a) and 132(1)(i) of the CGST and SGST Act, 2017.
The Investigation: Betting Apps & Fake Invoices
The DGGI’s probe centers on a massive network involving transactions worth roughly ₹13,000 crore.
- The Allegation: Investigators suspect that nearly ₹3,000 crore linked to illegal betting app transactions were routed through various banking channels using fake invoices.
- The Intermediaries: The probe is focused on the bank’s business partners, specifically entities like Wegofin Digital Solutions and PSRao Digital Solutions.
- CEO’s Health: Following his arrest, Gupta reportedly complained of chest pain and was shifted to JJ Hospital in Mumbai, where authorities are awaiting medical clearance to produce him before a jurisdictional court.
Fino Bank’s Response & Leadership Change
In a regulatory filing with the SEBI, Fino Payments Bank clarified its stance:
- No Impact on Bank Compliance: The bank stated that the investigation relates to its business partners and not to the bank’s own GST compliance or internal officials.
- Interim Leadership: During a special board meeting held on Friday evening, the bank appointed CFO Ketan Merchant as the “Head of the Organisation” to oversee day-to-day operations in Gupta’s absence.
- Operational Status: The bank maintains that its services and financial position remain unaffected, and it is fully cooperating with the authorities.
Market & Regulatory Context
- Stock Crash: Shares of Fino Payments Bank (FINOPB) plunged 7.5% on Friday, closing at ₹192.45 on the BSE.
- Timing of the Arrest: The arrest comes at a sensitive time, as the RBI had only recently (January 27, 2026) approved Gupta’s re-appointment for a second three-year term starting in May.
- SFB Transition: The bank is currently in the process of transitioning into a Small Finance Bank (SFB) after receiving in-principle approval from the RBI in December 2025.
The “Shock Wave”
Legal and banking experts, including Rajesh Narain Gupta (Chairman of SNG & Partners), have described the arrest of a sitting bank CEO under GST laws as a “shock wave” for the industry. Many are questioning the use of “immediate arrest” provisions for matters involving third-party business partners rather than the regulated entity itself.
