Fino Payments Bank MD Faces RBI Review Amid Record Deposits

Fino Payments Bank MD & CEO Rishi Gupta is currently absent from his duties due to a review of his leadership status by the bank and the Reserve Bank of India (RBI). This reassessment follows his arrest in February 2026 in connection with a GST investigation, from which he was later granted bail.

Leadership Status Under Review

Fino Payments Bank has officially notified that its Managing Director & Chief Executive Officer (MD & CEO), Mr. Rishi Gupta, has been unavailable to perform his duties for more than 45 days. This situation is linked to a reassessment of his 'fit and proper' status by the bank's committees and the RBI. The board has withdrawn a notice that sought shareholder approval for his reappointment, pending the outcome of this regulatory review.

Impact on SFB Conversion Goal

Leadership stability is vital for Fino Payments Bank, especially as it aims to convert into a Small Finance Bank (SFB) by December 2025. Any uncertainty at the top leadership level could raise concerns among investors and regulators, potentially affecting the progress and timeline of this crucial transition.

Background: GST Probe and Growth

Fino Payments Bank had received 'in-principle' approval from the RBI on December 5, 2025, to transition into an SFB, a significant strategic step to broaden its services. The bank has shown strong growth, reporting its highest-ever deposit balance of over ₹2,950 crore as of March 2026. Mr. Gupta was arrested on February 27, 2026, under GST rules, and was granted bail by a Hyderabad court on March 27, 2026. This arrest triggered the current review of his leadership status.

Operational Adjustments and Continuity

An interim CEO has been appointed to manage the bank's day-to-day operations, ensuring continuity and stability. Mr. Rishi Gupta's return to his role as MD & CEO is contingent upon the completion of a favourable outcome from the leadership status review by the bank and the RBI. The bank expects its strategic transition to an SFB to proceed, subject to final regulatory clearances, and will keep shareholders informed of further developments.

Key Risks and Regulatory Attention

• Leadership Uncertainty: The pending review of the MD & CEO's status poses a risk of leadership disruption. An unfavourable outcome could delay strategic initiatives like the SFB conversion.
• Regulatory Scrutiny: The GST probe that prompted the reassessment may lead to increased regulatory attention on the bank's operational practices.

Competitive Landscape

Fino Payments Bank operates alongside competitors such as Airtel Payments Bank, Paytm Payments Bank, and India Post Payments Bank (IPPB). While Airtel focuses on mobile solutions, IPPB on rural reach, and Paytm has faced regulatory challenges, Fino's strengths lie in its asset-light model and its pioneering role in SFB transition. Leadership challenges could test its competitive resilience.

Performance Highlights

• Fino Payments Bank achieved its highest-ever deposit balance, exceeding ₹2,950 crore, as of March 2026.
• Referral lending disbursements in Q4 FY26 reached ₹540-600 crore, reflecting strong momentum in this segment.
• The bank's target is to complete its transition to a Small Finance Bank (SFB) by December 2025.

Looking Ahead

Investors will be monitoring:

• The outcome of the RBI's review of MD & CEO Rishi Gupta's leadership status.
• The bank's progress and timeline for completing its SFB transition.
• Any further updates from the bank or regulators regarding the GST investigation.
• Management commentary on leadership stability and its impact on strategy during upcoming investor calls or statements.
• Key performance metrics, including deposit growth and referral lending, in light of leadership dynamics.