Legal · Financial Services

Fino Payments Bank faces crisis after CEO's arrest over GST evasion allegations

By Startup Enthusiast · 30 March 2026

What they do

Fino Payments Bank is a Mumbai-based payments bank aiming to convert into a small finance bank (SFB) to offer lending services

Its CEO, Rishi Gupta, was arrested in February 2026 over alleged GST evasion linked to real-money gaming transactions routed through shell entities

The arrest triggered a sharp decline in Fino's stock price and raised concerns about its governance and risk management capabilities

Fino Payments Bank faced a major crisis in early 2026 after its CEO, Rishi Gupta, was arrested for alleged GST evasion linked to real-money gaming transactions.
The arrest triggered a sharp decline in Fino's stock price, which fell to a 52-week low of ₹167.8 in March 2026.
Investigations by the Directorate General of GST Intelligence (DGGI) alleged that Gupta was among the 'masterminds' of a syndicate routing funds from illegal online gaming platforms through shell entities linked to Fino.
The alleged GST evasion is pegged at ₹840 Cr, based on ₹3,000 Cr in transactions involving three programme managers: PS Rao Digital Solutions, Billexpress Solutions, and Powerfin Technology.
Fino denied any involvement, stating that it had already blocked real-money gaming merchants in August 2025 and that all GST dues on its revenues had been paid.
The arrest led to a 70% drop in Fino's digital payment services revenue in Q4 FY26, and the bank suspended its UPI PQM (payments and QR merchant) business for merchant partners.
Fino's net profit for Q4 FY26 plummeted 70% to ₹7.1 Cr from ₹24 Cr in the year-ago quarter, with total income falling 14% YoY to ₹1,587.9 Cr in FY26.

The arrest of Fino's CEO triggered a governance crisis and raised questions about the bank's compliance and risk management practices.
The incident exposed structural issues in Fino's business model, which relies heavily on third-party programme managers for a significant portion of its business volume.
The crisis has prompted fintech and payments firms across the board to tighten internal controls and consolidate key responsibilities.
Fino's transition to a small finance bank (SFB) is now in question due to leadership uncertainty and regulatory scrutiny.

Fino Payments Bank is a Mumbai-based payments bank that provides digital payment services, savings accounts, and money transfer services to semi-urban and rural India.
It operates through a network of over 20 Lakh merchants, small shop owners, local agents, and business correspondents who act as human ATMs and banking touchpoints.
The bank has accumulated 1.75 Cr CASA (current account and savings account) customers and positions itself as the infrastructure layer for digital payments in India's hinterland.
Fino earns revenue primarily from three streams: retail banking, treasury, and other banking operations, including cash management services (CMS) and business correspondent banking.
The bank had been working towards converting into a small finance bank (SFB) to offer lending services, but the arrest of its CEO has cast doubt on its ability to meet regulatory requirements.

Fino's management has stated that its revenue for the month of April would be 'not zero but minimal', and a new digital plan would be shared towards the end of the current quarter.
The bank has deferred seeking shareholders' approval on Gupta's reappointment, stating it will do so at an 'appropriate time', subject to regulatory compliance and re-assessment of Gupta's 'fit and proper status'.