Rishi Gupta, the Managing Director and CEO of Fino Payments Bank, has encountered a significant legal hurdle as the Telangana High Court dismissed his writ petition seeking bail in a high-profile tax evasion case. The alleged Goods and Services Tax (GST) evasion is pegged at a staggering ₹840 crore, raising serious concerns about the integrity of financial operations within the bank.
Gupta’s arrest, which occurred in late February 2026, is rooted in accusations that he masterminded transactions involving shell entities, facilitating an organized syndicate that reportedly routed funds linked to illegal online gaming platforms. The Directorate General of GST Intelligence is spearheading the ongoing investigation, which has drawn considerable media attention.
In a statement following the court’s decision, Gupta’s legal team argued that his arrest was “arbitrary, illegal, highhanded and violative of Articles 14, 19, 21 and 22 of the Constitution of India.” Despite these claims, the court upheld the law enforcement’s actions, leaving Gupta in judicial custody.
In the wake of Gupta’s arrest, Fino Payments Bank has appointed Ketan Merchant as interim CEO for a maximum period of four months. The bank has assured stakeholders that its operations remain stable and uninterrupted, emphasizing its commitment to engage constructively with regulators.
Since Gupta’s arrest, Fino Payments Bank’s shares have suffered a notable decline, dropping nearly 28%, with the share price closing at ₹139.50, down from a 52-week high of ₹135.2. The bank had recently received in-principle approval from the Reserve Bank of India to transition into a small finance bank, a move that now faces scrutiny amidst the ongoing legal challenges.
Merchant has publicly stated that the bank and Gupta have “nothing to do with the actions of the programme managers,” attempting to distance the organization from the allegations surrounding Gupta’s arrest. Meanwhile, the bank continues to add approximately 10,000 CASA accounts daily, indicating a robust customer base despite the turmoil.
As the investigation unfolds, observers are keenly watching how Fino Payments Bank navigates this crisis and what implications it may have for the broader financial sector in India. Details remain unconfirmed regarding the full extent of the alleged tax evasion, and the bank’s future trajectory remains uncertain.
