How Fino Payments Bank MD & CEO Rishi Gupta can be arrested for ‘issue with business partner’? FM Nirmala Sitharaman promises review

Following the arrest of Fino Payments Bank Managing Director and CEO Rishi Gupta on Friday, industry veteran Mohandas Pai has questioned the use of arrest powers under GST laws, saying it is a potential "overreach". Pai also tagged Finance Minister Nirmala Sitharaman, who has responded that she will look into the matter.

On Friday, the arrest was carried by the Hyderabad unit of the Directorate General of GST Intelligence (DGGI) in Mumbai.

Fino Payments Bank, in a regulatory filing to stock exchanges, said that the bank clarified that the investigation pertains to a "business partner" and is not related to its own GST compliance.

"The issue is with regards to a GST investigation pertaining to programme managers who have relationships with other banks including Fino Payments Bank Limited," said CFO Ketan Merchant in a statement. "The bank and its MD & CEO Rishi Gupta have nothing to do with the actions of the programme managers."

The bank said it is actively taking appropriate steps to address and overcome the situation. It further informed that Chief Financial Officer Ketan Merchant has been appointed to head the organisation and oversee day-to-day operations.

"Presently there is no impact on the Bank. In case of any impact in the future, appropriate disclosure will be made to the stock exchanges," said the lender. As per the statement, the Ground of Arrest against the CEO was issued on February 27, 2026 at 3:55 a.m.

Finance Minister Nirmala Sitharaman 's response

Industry veteran Mohandas Pai questioned the use of arrest powers under GST laws, calling them "overreach." Tagging Finance Minister Nirmala Sitharaman, Pai called for safeguards against misuse.

He said, "Madame Nirmala Sitharaman, please see this. How can a CEO of a regulated bank be arrested for an issue with a business partner? Is this not overreach? ⁦The Ministry of Finance has given vast powers for GST. What is the safeguard for citizens against misuse? Please intervene."

In response, Nirmala Sitharaman has posted on X that she would "look into" the matter.

She said, "Thanks for sharing this. Will check."

Recently, Fino Payments Bank received in-principle approval from the Reserve Bank of India to convert into a small finance bank, making it the first bank among its peers to do so. Fino is the only publicly listed entity in the payments bank space that, after conversion, is permitted to offer loans, which payments banks are not permitted to do.