FM Sitharaman to review Fino Payments Bank CEO Rishi Gupta’s arrest under GST Act

Finance Minister Nirmala Sitharaman on Saturday said she will look into the matter related to the arrest of Fino Payments Bank Managing Director Rishi Gupta for 'violating the law' related to the Goods and Services Tax. The bank has maintained that Gupta is not connected to the alleged GST-related issue under investigation.

Sitharaman responded to concerns raised on social media by Mohandas Pai, former CFO and board member at Infosys. Acknowledging his post, she wrote: “Thanks for sharing this. Will check.”

In his message, Pai questioned how the chief executive of a regulated bank could be arrested over a matter involving a business partner. He also asked whether the action amounted to overreach, noting that the Finance Ministry has granted extensive powers under GST laws. Pai further sought clarity on what safeguards exist to prevent potential misuse of those powers and called for the minister’s intervention.

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Following the arrest, a special board meeting was convened wherein Ketan Merchant, Chief Financial Officer of the bank, was appointed as head of the organisation to carry on and oversee day-to-day operations, Fino Payments Bank said in a regulatory filing.

Gupta has been ”arrested under the provisions of Sections 132(1)(a) and 132(1)(i) of the CGST and SGST Act, 2017,” it said.

The investigation is related to business partner(s) of the bank, and not GST compliance by it, the bank said.

”The bank is cooperating with the authorities to provide all necessary information. Presently, there is no impact on the bank… Any further material development in this regard will be disclosed in due course,” it said.

The payment bank clarified that none of the bank officials were involved, and the investigation was related to business partner(s) of the bank.

Commenting on the arrest, Rajesh Narain Gupta, Chairman at the law firm SNG and Partners, said it created a shock wave among bankers and professionals.

Gupta also wondered why immediate arrest happens under GST laws, saying the government should re-examine the ”draconian” provisions.