On the morning of February 27, 2026, the board of Fino Payments Bank was scheduled to meet for its FY27 strategy planning session. In December 2025, the payments bank had received in-principle RBI approval to convert into a Small Finance Bank, and just weeks earlier, its board had re-appointed Rishi Gupta as Managing Director and CEO for another three-year term.

But by evening, CFO Ketan Merchant had been designated to run the bank.

And, Gupta had been arrested under Sections 132(1)(a) and 132(1)(i) of the CGST Act and SGST Act, 2017.

In a stock exchange disclosure, Fino said the "investigation is relating to business partner(s) of the Bank and not relating to the GST compliance of the Bank." The bank said it is co-operating with authorities and that the RBI has been informed.

Sources said he was arrested by the Directorate General of GST Intelligence (DGGI), Hyderabad. GST officials visited the Fino Bank head office on February 26 to question Gupta and other senior management members regarding the bank's business partners.

Even within the bank, clarity appeared limited.

A Fino official, who did not wish to be named, said, "This has nothing to do with Fino as a bank. It is more to do with business partners whose GST investigation was ongoing. There is no clarity on what exactly this is, or why he was arrested. These are API partners who use bank pipes for processing digital transactions."

The thread leads to Wegofin, The Head and Tale has learnt.

Sources indicate that Gupta's arrest connects to an ongoing DGGI investigation into Wegofin Digital Solutions, a technology service provider (TSP), and a Rs 5,000 crore illegal online gaming-fintech network it is alleged to be part of.

The DGGI had, in the weeks prior, arrested Wegofin's founding directors, Y S Prabhu Kumar and Raja Sekhar Reddy, in connection with an alleged Rs 5,000 crore fund diversion and tax evasion case linked to illegal online gaming transactions. The DGGI found that Wegofin was routing funds through shell companies and powering illegal gaming platforms.

Wegofin had been using banking infrastructure – APIs – to process digital transactions.

As investigators dug deeper into the Wegofin network, Fino Bank's name surfaced. When the money trail was followed, it reportedly led investigators toward Fino and, eventually, to Gupta.

Wegofin is not a licensed payment aggregator. It operates as a TSP – a category of company that functions like a payment gateway but without the regulatory licensing that governs formal payment aggregators. TSPs partner with banks, access their payout APIs, and process large volumes of transactions on behalf of clients.

At this stage, it remains unclear whether investigators believe there was knowledge, negligence, compliance gaps, or merely infrastructure exposure. The GST department has not publicly detailed the grounds for Gupta's arrest.

As The Head and Tale reported in September, the TSP-bank model has long been the invisible engine powering online gaming transactions. Read the full investigation here.

We have sent queries to Fino late on Friday night. We will update the story once a response is received.