Fino Payments Bank is navigating a significant leadership crisis following the arrest of its Managing Director and Chief Executive Officer Rishi Gupta on February 27, 2026. The bank has swiftly responded with immediate governance changes through a special Board meeting to ensure operational continuity.

Arrest Details and Legal Provisions

Rishi Gupta was arrested under the provisions of Section 132(1)(a) and 132(1)(i) of the CGST and SGST Act, 2017. The Ground of Arrest was issued on February 27, 2026 at 03:55 a.m. (IST). The investigation relates to the bank's business partners and is not connected to the GST compliance of the bank itself.

Emergency Board Meeting and Leadership Transition

A special Board meeting was convened on February 27, 2026, commencing at 06:45 p.m. (IST) and concluding at 07:06 p.m. (IST). During this meeting, the Board appointed Ketan Merchant, Chief Financial Officer, as Head of the Organization to oversee day-to-day operations in Gupta's absence.

Investigation Scope and Bank's Position

The bank has clarified that none of its officials are involved in the matter under investigation. The probe specifically relates to business partners of the bank, and bank officials are cooperating with the investigation. The estimated amount involved remains under review, with the bank committed to disclosing any material developments.

Regulatory Compliance and Impact Assessment

Fino Payments Bank has fulfilled its disclosure obligations under Regulation 30 of the SEBI Listing Regulations, notifying both BSE Limited (Scrip Code: 543386) and National Stock Exchange of India Limited (Symbol: FINOPB). The bank has also informed the Reserve Bank of India about the situation. Currently, there is no impact on the bank's operations, though appropriate disclosures will be made if any future impact materializes.

Operational Continuity Measures

Despite the leadership disruption, the bank emphasizes that its operations remain unaffected. Under Merchant's interim leadership, the institution continues serving customers without service disruptions. The bank is actively taking appropriate measures to address and overcome the situation while maintaining business continuity.

Fino Payments Bank Limited has initiated a postal ballot process to seek shareholder approval for critical governance matters related to its Managing Director and Chief Executive Officer, Rishi Gupta. The bank has issued a comprehensive notice dated January 29, 2026, outlining two key resolutions that require member approval through remote electronic voting.

Key Resolutions for Shareholder Approval

The postal ballot encompasses two significant resolutions that will shape the bank's leadership structure:

Executive Compensation Structure for FY 2024-25

The first resolution seeks approval for Mr. Rishi Gupta's comprehensive remuneration package for FY 2024-25, which has already received Reserve Bank of India approval. The compensation structure demonstrates a balanced approach between fixed and performance-based components:

The RBI approved the fixed remuneration of ₹2.44 crore through its letter dated November 26, 2024, and subsequently approved the performance bonus of ₹3.26 crore via letter dated December 10, 2025. The compensation structure includes malus and clawback clauses in accordance with RBI guidelines and the bank's compensation policy.

Leadership Continuity and Re-appointment

The second resolution addresses leadership continuity by proposing Mr. Gupta's re-appointment for a three-year term. His current tenure as MD & CEO expires on May 01, 2026, having been approved by shareholders at the 6th Annual General Meeting in September 2022. The RBI has already granted approval for his re-appointment through its letter dated January 27, 2026.

E-voting Process and Timeline

The bank has established a comprehensive electronic voting framework to facilitate shareholder participation:

Shareholders whose names appear in the Register of Members or Register of Beneficial Owners as on the cut-off date will be eligible to participate in the voting process. The bank is sending the postal ballot notice electronically to members whose email addresses are registered with depositories or the registrar.

Executive Profile and Performance Metrics

Mr. Rishi Gupta, 57, brings over 30 years of experience in financial services and has been instrumental in the bank's transformation journey. As one of Fino's founding members, he has led the organization through significant milestones, including becoming the first payments bank to list on stock exchanges in November 2021.

Under his leadership, the bank has achieved notable financial performance in FY 2024-25:

The bank recently received 'In-principle' approval from the RBI for conversion into a Small Finance Bank, marking the first instance of a payments bank in India receiving such approval. This achievement reflects the strength of the bank's operating model and governance standards under Mr. Gupta's stewardship.

Regulatory Compliance and Governance

The postal ballot process adheres to comprehensive regulatory requirements under the Companies Act, 2013, SEBI Listing Regulations, and Banking Regulation Act, 1949. The bank has appointed qualified scrutinizers to ensure fair and transparent voting processes, with results expected within two working days of the e-voting conclusion.

Members can access the complete postal ballot notice on the bank's website at www.fino.bank.in , stock exchange websites, and NSDL's e-voting portal at www.evoting.nsdl.com . The resolutions, if passed by requisite majority, will be deemed effective from the last date of e-voting, March 29, 2026.