Fino Payments Bank chief Rishi Gupta granted bail in GST case

In major relief, Fino Payments Bank chief Rishi Gupta has been granted bail by the Special Judge for Trial of Economic Offences Cases in Hyderabad, nearly a month after his arrest.

According to the court order reviewed by Business Standard, Gupta was required to furnish a personal bail bond of ₹10 lakh, along with two sureties of the same amount.

The court directed him to deposit his passport and seek prior permission before leaving India. He has also been instructed to appear before authorities on the first and third Monday of every month until further orders.

Last month, Gupta was arrested over alleged goods and services tax (GST) evasion involving the bank’s programme managers linked to the real-money gaming (RMG) sector. All forms of RMG have been banned in India since August last year.

The alleged evasion pertains to transactions carried out by three programme managers in the RMG space before the ban was enforced. These managers accounted for nearly 8–10 per cent of the company’s annual throughput.

Gupta was arrested under the provisions of Sections 132(1)(a) and 132(1)(i) of the CGST and SGST Acts, 2017.

In his absence, Ketan Merchant, chief financial officer (CFO) of the bank, has been appointed interim chief executive officer (CEO). His appointment was approved by the Reserve Bank of India (RBI) for three months, or until Gupta resumes office following a reassessment of his “fit and proper” status by the bank’s nomination and remuneration committee (NRC) and board, and a final decision by the RBI.

The bank maintained that it followed “adequate due diligence and KYC norms” while onboarding programme managers or merchants, adding that it did not bypass any due diligence processes in the cases under scrutiny.

Fino is also the first and only payments bank so far to have applied for conversion into a small finance bank (SFB).

In December last year, the RBI granted in-principle approval for the conversion. Fino has up to 18 months to complete the transition into an SFB.

Source from: https://www.business-standard.com/companies/news/fino-payments-bank-chief-rishi-gupta-granted-bail-126032601093_1.html