New Delhi: The Directorate General of Goods and Services Tax Intelligence (DGGI) may soon recommend an Enforcement Directorate (ED) probe into online gaming transactions connected with Fino Payments Bank Ltd, following detection of multiple instances of suspected money laundering, said people with knowledge of the matter.
Investigators found many cases of funds routed through multiple accounts or entities to obscure their origin, necessitating a deeper scrutiny under the anti-money laundering law, they said. The matter is connected to an ongoing investigation into alleged GST evasion related to online betting applications involving transactions totalling around ₹10,000 crore.
The DGGI is likely to recommend filing of Enforcement Case Information Report (ECIR), which is a formal report akin to a first information report filed by police when a crime is reported, triggering a detailed investigation by the ED, according to the people. “Based on the transaction patterns and the movement of the proceeds, it triggered a wider probe,” a senior official told ET, requesting anonymity.
However, Fino Payments Bank said in response to ET’s query, “The assertion that the ongoing DGGI investigation may expand to include alleged violations under the Prevention of Money Laundering Act (PMLA) or involve the Enforcement Directorate is incorrect and speculative. As we have consistently disclosed in our exchange filings, the bank is currently not subject to any investigation by any authority other than the Director General of GST Intelligence.”
It further said that it is important to clarify that the DGGI’s inquiry is in relation to certain programme manager(s) or merchants associated with multiple banks, including Fino Payments Bank, and is not directed at the GST compliance of the bank itself.
“The bank is extending its full cooperation to the authorities and is providing all relevant information pertaining to the program manager(s) / merchants in question,” it said.
The payments bank added that it will keep the exchanges and stakeholders informed of material developments in the matter.
According to the official cited earlier, DGGI investigators believe that the presence of multiple shell companies and dummy programme managers controlling onboarding of merchants requires a detailed examination by the ED into how funds were layered, concealed or moved in violation of the PMLA. Investigators allege that large volumes of funds were processed through Fino Payments Bank’s platform without proper tax compliance and that dummy merchants were onboarded to facilitate gaming services without invoices. “The investigation is continuing and may take time… A detailed report will soon be sent to the finance ministry on the findings so far,” the official said, without divulging further details.
The case drew public attention after the Navi Mumbai-headquartered payments bank’s chief executive Rishi Gupta was arrested last week by the Hyderabad unit of the DGGI.
A Telangana court rejected Gupta’s bail petition. Counsel for Gupta submitted before the court that Fino Payments Bank operates solely as a payments and banking platform, providing infrastructure for transactions without being responsible for the tax compliance of sellers or buyers. The bank has also paid the GST demand raised by the department.
In December 2025, Fino Payments Bank received in-principle approval from the RBI to convert into a small finance bank. Following Gupta’s arrest, the payments bank appointed its chief financial officer, Ketan Merchant, as interim CEO.
