Fino Payments Bank has decided to delay seeking shareholder approval for the reappointment of Rishi Gupta as CEO and Managing Director after his recent arrest related to a GST evasion case.
The bank had initially requested approval for Gupta's remuneration for FY25 and his reappointment for a three-year term from May 2026 to May 2029. However, the board has now opted to defer this request.
In an exchange filing, Fino stated that it will pursue shareholder approval for Gupta's reappointment at a later date, contingent upon compliance with regulatory requirements and a reassessment of Gupta's fit and proper status by the board's nomination and remuneration committee, as well as the Reserve Bank of India's (RBI) input.
Fino emphasized that Gupta's candidacy for reappointment remains intact and has not been withdrawn or prejudiced by this decision.
Earlier this year, the RBI had approved Gupta's reappointment as MD and CEO, but circumstances changed following his arrest.
Gupta was taken into custody by the Hyderabad unit of the Directorate General of GST Intelligence (DGGI) last month as part of an investigation into alleged tax evasion linked to online betting, exceeding ₹840 crore.
The DGGI claims Gupta was involved in a scheme that funneled funds from illegal online gaming platforms through shell companies.
Fino has countered that the investigation relates to program managers from various banks and does not implicate its GST compliance.
Recently, a special judge in Hyderabad granted bail to Gupta after the Telangana High Court dismissed his earlier petition for bail.
In light of Gupta's arrest, Fino appointed CFO Ketan Merchant as interim CEO and established a committee of senior executives and board members to manage operations.
In December, Fino received in-principle approval from the RBI to transition into a small finance bank (SFB). Despite the CEO's arrest, the bank remains committed to this transition.
Since Gupta's arrest, Fino's shares have faced significant pressure, plummeting over 35%. However, they were trading 3.10% higher at ₹126.55 on the BSE at 13:10 IST.
