India’s Fino Payments Bank said on Wednesday its planned conversion into a small finance bank is progressing within the central bank’s 18‑month timeline amid scrutiny linked to a tax probe that has led to the arrest of its CEO.
The Reserve Bank of India had granted the payments bank an “in‑principle” approval in December last year to convert into a small finance bank, a move that would allow Fino to accept larger deposits, offer loans and credit facilities.
Fino said on March 2 that its managing director and CEO Rishi Gupta was arrested under the country’s goods and services tax law in an investigation involving the lender’s business partners. The bank has said the arrest was not linked to its own GST compliance.
Chief Financial Officer Ketan Merchant is overseeing operations in Gupta’s absence.
The lender said on Wednesday that it was not associated with shell entities, had not bypassed know-your-customer norms, and had not onboarded any merchant or programme manager registered outside India.
Fino said that it does not foresee any financial liability from the matter and its operations remain normal as it works to complete the transition to a small finance bank.
Reuters
