Vanshika verma | Mar 6, 2026 |
Fino Payments Bank CEO Rishi Gupta Challenges Arrest in Telangana High Court
The High Court of Telangana heard a case on Tuesday about the arrest of Rishi Gupta, the Managing Director and CEO of Fino Payments Bank. He was arrested in connection with a suspected GST evasion case linked to online betting apps.
The case was heard on March 3, 2026, by a bench of Justice A. Krishna Reddy and Justice G.M.M. at the High Court of the State of Telangana.
Senior lawyer Abhishek Manu Singhvi appeared for Gupta and the other petitioners through video conference. He argued that Gupta’s arrest and detention by the Central Goods and Services Tax (CGST) authorities were illegal. The petition challenges the arrest notice issued on February 27, 2026, and his remand by the Special Judge for Economic Offences in Hyderabad.
On behalf of the government, Additional Solicitor General B. Narasimha Sharma represented the Union government, while N. Venkataraman appeared for the Central Board of Indirect Taxes and Customs. The government asked the court for time to submit documents related to the case. The court allowed time until March 5 and scheduled the next hearing for March 6.
The arrest happened after an investigation by the Directorate General of GST Intelligence (DGGI), Hyderabad unit. The agency is looking into suspected GST evasion connected to online betting apps.
Investigators believe that about Rs. 3,000 crore from betting app transactions may have passed through banking channels. The total betting network being investigated may involve around Rs 13,000 crore in transactions.
Officials suspect that money from betting apps was moved through several companies, including digital service firms. They are also examining claims that dummy merchants were created to provide gaming services without proper invoices, which may have led to GST evasion of more than Rs. 30 crore.
Regulators are reviewing the role of payment processors and intermediaries in facilitating these payments and checking their compliance with due-diligence norms.
The matter surfaces at a crucial moment for Fino Payments Bank. In December, the bank received initial approval from the Reserve Bank of India (RBI) to convert into a small finance bank.
If the conversion happens, the bank will be allowed to accept larger deposits and start lending services, such as loans for MSMEs and home loans. Currently, payment banks have a Rs. 2 lakh limit on savings accounts.
Experts say that this investigation and regulatory scrutiny could affect the bank’s plans to become a small finance bank.
The case is part of a larger crackdown on online gaming and betting platforms, where authorities are closely checking GST payments, classification of services, and invoicing practices.
The upcoming hearing on March 6, 2026, may provide further clarity after the government submits its documents to the court.
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