Synopsis: In a major leadership disruption, Rishi Gupta, the Managing Director and CEO of Fino Payments Bank, was arrested on Friday, February 27, 2026, in connection with an investigation under the CGST and SGST Act. The bank has immediately appointed Chief Financial Officer (CFO) Ketan Merchant as the interim head to oversee day-to-day operations.
Fino Payments Bank MD Rishi Gupta Arrested
The banking sector was jolted today. Fino Payments Bank disclosed the arrest of its top executive through an exchange filing under Regulation 30 of the SEBI LODR.
The arrest was made under the provisions of the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) Act.
The Nature of the Investigation
Despite the high-profile arrest, the bank has distanced its core operations from the legal matter.
In its official statement, Fino Payments Bank clarified:
- Business Partner Focus: The bank stated that the investigation involves specific business partner(s). It clarified that the matter does not directly relate to its own GST compliance.
- Cooperation: The lender emphasized that its officials are actively cooperating with the authorities and providing all necessary information to resolve the matter.
- Operational Continuity: The bank assured customers and shareholders that there is no immediate impact on its services or daily functions.
Leadership Transition: Ketan Merchant Steps In
To ensure administrative stability, the Board has appointed Ketan Merchant, the current CFO, to lead the organization in Gupta’s absence.
Merchant, who joined the bank in 2018 and has over 25 years of experience in the banking sector (including stints at HSBC and Barclays), is a pivotal figure in Fino’s “DDD” (Data, Distribution, and Digital) strategy.
He will serve as the interim head until the Board resolves otherwise or Gupta is able to resume his duties.
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Market Context and Recent Developments
The timing of the arrest is sensitive for the lender, which received “in-principle” approval from the RBI in December 2025 to transition into a Small Finance Bank (SFB).
- Stock Reaction: Following the news, Fino Payments Bank shares faced pressure on the bourses, contributing to the broader “risk-off” sentiment seen in the Indian markets today.
- Financial Health: In its Q3FY26 results (ended December 31, 2025), the bank had reported steady growth in its deposit base and throughput, signaling strong underlying business momentum prior to this regulatory hurdle.
The bank has committed to making further disclosures as the situation evolves. Meanwhile, analysts are closely watching whether this leadership crisis will impact the final conversion timeline into a Small Finance Bank.
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