Fino Payments Bank said on Wednesday that its plan to convert into a small finance bank is progressing within the Reserve Bank of India‘s 18-month timeline amid an investigation linked to a Goods and Services Tax (GST) probe that has led to the arrest of its managing director and CEO, Rishi Gupta.
“The Bank expects to complete the process before the stipulated timeline with a differentiated business model and assurance first approach,” Fino Payment Bank said in an exchange filing filed on Wednesday.
The Reserve Bank of India had granted an ‘in-principle’ approval in December last year for the conversion of the Bank from a Payments Bank to a Small Finance Bank. This move would allow Fino to accept larger deposits, offer loans and credit facilities.
The Bank has clarified that they are “not associated with any shell companies as merchants or program managers, nor does it have any such companies in its group.” The bank has also disclosed that it is following adequate due diligence and KYC norms, and has not bypassed any KYC / due diligence processes for the merchants or program managers in question.
Fino has earlier disclosed that the arrest of Rishi Gupta, Managing Director (MD & CEO) of Fino Payments Bank Limited, was made under the provisions of section 132(1)(a) and 132(1) (i) of the CGST and SGST Act, 2017, respectively, on February 27, 2026. The bank has said that the investigation is related to business partner(s) of the Bank and not related to the GST compliance of the Bank.
Fino Payments Bank Limited (a subsidiary of Fino Paytech Ltd) started its operations in June 2017 after receiving the final license from the RBI. It is a technology-led, asset-light digital bank serving emerging India and operates a high-volume, low-cost model focused on financial inclusion.
The Bank processed ₹1.1 lakh crore in transactions in Q2 FY26, a 7% YoY increase, with 55% digital throughput.
