Synopsis: Fino Payments Bank shares fell 13% after its CEO, Rishi Gupta, was arrested in a GST-related investigation linked to third-party programme managers. The bank clarified that the probe does not concern its own GST compliance and denied wrongdoing. Following the clarification, investor sentiment improved, and the stock recovered toward its opening price.
Fintech stocks witnessed sharp volatility after a leading payments bank reported the arrest of its CEO in connection with a GST-related investigation. The development triggered a double-digit fall in the company’s share price during the session. However, the management later issued a detailed clarification, stating that business operations remain normal and financial stability is intact.
With a market cap of Rs 1,600 crore, the shares of Fino Payments Bank Ltd fell about 13% in today’s trading session and reached a low of Rs 167.80. When compared to its previous day’s closing price of Rs 192.45, it is trading at a PE of 22 compared to its industry PE of 21.4.
Why was the CEO arrested?
The arrest of Mr Rishi Gupta, Managing Director and CEO of Fino Payments Bank, was made public by Fino Payments Bank to the stock exchanges on February 27, 2026. As per the filing, he was arrested under Sections 132(1)(a) and 132(1)(i) of the CGST and SGST Act, 2017, which pertain to something that happened with the GST law. Fino Payments Bank made it clear that this is about people who do business with Fino Payments Bank, not about how Fino Payments Bank follows the GST rules.
Following the arrest, the bank convened a special board meeting the same evening between 06:45 p.m. and 07:06 p.m. (IST) to ensure operational continuity. The Board appointed Mr Ketan Merchant, Chief Financial Officer, as Head of the Organisation to oversee day-to-day operations in the absence of the MD & CEO. The filing also clarified that the investigation relates to business partners and not to the bank’s own GST compliance, and that none of the bank officials were involved
Company clarification
In a clarification on March 2, 2026, the bank talked about media reports and rumours. It said that the investigation by the Director General of GST Intelligence is about program managers linked to banks, not just the banks’ GST compliance. The bank said it is working closely with authorities and giving them all the information they need.
The bank also clearly denied claims of GST evasion, fake invoicing or involvement in betting. It said its process for onboarding merchants follows rules, and the relevant business teams do this, not the MD & CEO. The bank stated that it has made GST payments and that invoices were based on services used by programme managers and merchants.
The bank mentioned that it has a system to manage risk and monitor transactions. It also said it does not keep accounts of programme managers and does not think it will have any financial issues from this matter right now. The bank said everything is operating normally and that the RBI has given it 18 months to become a small finance bank, which it plans to do on schedule.
The clarification played a crucial role in stabilizing investor sentiment. Since the bank clearly stated that the issue was related to third-party program managers and not a systemic lapse within the institution, concerns over financial impact eased. With assurance of business continuity and no anticipated liability, the stock recovered during the session and moved back toward its opening price as uncertainty reduced and confidence improved.
The revenue from operations for the company stood at Rs 63 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 49 crores, up by about 29 per cent YoY. However, the net profit stood at Rs 12 crore in Q3 FY26, down compared to the Rs 23 crore profit in Q3 FY25.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Bank Stock Crashes 13% After CEO gets Arrested in GST Case appeared first on Trade Brains.