Legal · Financial Services

Fino Payments Bank CEO arrested in GST evasion case

By Startup Enthusiast · 4 March 2026

What they do

Fino Payments Bank serves rural and semi-urban customers with banking and payment services

CEO Rishi Gupta was arrested by the GST department on 27 February 2026 over alleged evasion of Rs 840 crore

The bank denies any wrongdoing and says the probe involves programme managers, not the bank itself

Rishi Gupta, CEO of Fino Payments Bank, was arrested by the GST department on 27 February 2026.
The arrest is part of a DGGI probe into alleged GST evasion through shell entities and online gaming funds routed via programme managers.
The alleged GST evasion amount is Rs 840 crore, based on a Rs 3,000 crore turnover of entities.
An estimated Rs 2,500 crore was routed through merchants linked to online gaming.
Fino Payments Bank denies any GST evasion or involvement in betting activity.
The bank says the investigation pertains to programme managers associated with multiple banks, not the bank's GST compliance.
CFO Ketan Merchant has been appointed interim head after Gupta's arrest.
The board has constituted a committee of directors and senior executives to oversee operations.

The DGGI is investigating online money gaming, which is banned in India.
Alleged shell entities operated online gaming platforms including funinmatch360.com and RaceJeet.
The RBI had asked the bank to stop the Programme Manager model for merchant onboarding and move to a payment aggregator model.
Real money gaming merchants were blocked in August 2025 after the government disallowed the activity.
Industry bodies Payments Council of India and Startup Policy Forum have supported Gupta.

Fino Payments Bank caters to rural and semi-urban customers.
It has a customer base of 1.7 crore, with 60 lakh digitally active customers.
The average annual income of customers is Rs 4 lakh.
The bank has a strong B2B UPI business, but data excludes merchant business transactions.
UPI transactions fell from 9.6 lakh in November 2025 to 4.6 lakh in January 2026.
Digital throughput declined from Rs 75,000 crore in Q4 FY25 to Rs 66,000 crore in Q3 FY26.
Digital revenue fell from Rs 117 crore in Q4 FY25 to Rs 62 crore in Q3 FY26.
The average UPI ticket size is Rs 2,900, about double a typical UPI transaction.

The bank says operations continue uninterrupted.
The bank expects to complete the SFB transition before the 18-month timeline.
The bank says there is no impact on the SFB transition from the case.
Finance Minister Nirmala Sitharaman says she will review the issue.