Fino Bank Delays CEO Reappointment After GST Arrest

Fino Payments Bank has postponed seeking shareholder approval for the reappointment of its CEO and Managing Director, Rishi Gupta, following his arrest in a Goods and Services Tax (GST) evasion case. The bank had initially sought shareholder consent for Gupta’s remuneration for fiscal year 2025 and his reappointment for a three-year term from May 2026 to May 2029.

In an exchange filing, Fino stated that it would seek shareholder approval for the reappointment at an “appropriate time,” contingent on regulatory compliance, reassessment of Gupta’s suitability by the board’s nomination and remuneration committee, and a review by the Reserve Bank of India (RBI).

The bank emphasized that Gupta’s candidacy for CEO remains unaffected and has not been withdrawn or prejudiced by this decision. The RBI had approved Gupta’s reappointment in January, but the situation changed after his arrest by the Directorate General of GST Intelligence (DGGI) in Hyderabad, in connection with an investigation into alleged online betting-linked tax evasion exceeding ₹840 crore.

The DGGI alleges Gupta was part of a syndicate funneling funds from illegal online gaming platforms through shell entities. Fino claims the investigation concerns program managers from various banks and does not relate to the bank’s GST compliance. Gupta was granted bail by a special court in Hyderabad after the Telangana High Court dismissed his bail petition earlier in the week.

Following Gupta’s arrest, Fino appointed CFO Ketan Merchant as interim CEO and formed a committee of senior executives and board members to oversee operations. Fino received in-principle approval from the RBI last December to convert into a small finance bank (SFB) and has affirmed its commitment to this transition despite the CEO’s arrest.

Since Gupta’s arrest, Fino Payments Bank’s shares have declined by over 35%. At 13:10 IST, shares were trading 3.10% higher at ₹126.55 on the BSE.