Fino Payments Bank CEO's Arrest Challenge Dismissed Amid Record Deposits

Fino Payments Bank's deposit balance has reached a new high of ₹2900 crore this month. Meanwhile, the Telangana High Court has dismissed a petition by Managing Director and CEO Rishi Gupta challenging his arrest.

Court Rejects CEO's Arrest Plea

The Telangana High Court on March 24, 2026, rejected a writ petition filed by Fino Payments Bank MD & CEO Rishi Gupta that sought to challenge his arrest. A separate bail application for Mr. Gupta is currently before the Special Judge for Economic Offences.

This court decision comes as Fino Payments Bank announced a record deposit balance of ₹2900 crore for the current month, indicating operational stability despite the ongoing legal challenges faced by its top executive.

GST Evasion Probe Details

The arrest is reportedly connected to an investigation into alleged Goods and Services Tax (GST) evasion. The probe focuses on alleged illicit fund flows from online betting operations, potentially involving business partners and shell entities.

Fino Payments Bank has stated that the investigation involves its business partners and not the bank's direct GST compliance, and no other bank officials are implicated.

Bank's Previous Regulatory Encounters

Prior to this executive arrest, Fino Payments Bank had faced regulatory actions. In June 2025, the Reserve Bank of India (RBI) fined the bank ₹29.6 lakh for exceeding end-of-day balance limits. In October 2025, the bank settled a case with the Securities and Exchange Board of India (SEBI) for ₹5.8 lakh related to delayed disclosure of employee fraud.

After Mr. Gupta's arrest, CFO Ketan Merchant was appointed interim head to manage daily operations.

Implications and What to Monitor

The High Court's dismissal of the MD & CEO's legal challenge against his arrest marks a significant development, although further legal options may be pursued. The bank maintains its commitment to governance and assures continued operations.

However, the legal entanglements of its chief executive could create uncertainty and affect investor sentiment. The outcome of Mr. Gupta's pending bail application is a key point to watch. Any further developments from the ongoing GST investigation or additional regulatory actions could also impact the bank's valuation and stakeholder confidence.

Fino Payments Bank operates in a competitive digital payments sector alongside institutions like AU Small Finance Bank, Bandhan Bank, and IDFC First Bank. While peers manage their own operational and regulatory issues, Fino's situation is unique due to the direct legal proceedings against its CEO, introducing a notable governance risk dimension.