Fino Payments Clarifies GST Probe; Denies Any Direct Involvement

Fino Payments Limited, known for its “phygital” (physical + digital) business model, recently informed BSE Ltd and NSE Ltd to clarify the situation regarding Fino Payments Bank Limited in response to recent media reports and publications.

Bank’s Response

The following are the Fino Payments Bank’s official responses to various media speculations:

• The investigation by the Director General of GST Intelligence is related to certain program managers who work with multiple banks, including our Bank. It is not about the GST compliance of the Bank itself. (program managers are entities that bring merchants to the Bank for UPI transactions.)
• The Bank is fully cooperating with the authorities and is providing all required information regarding the concerned program managers.
• The Bank and its officials are not involved in the business activities or actions of the program managers under investigation.
• The Bank does not directly or indirectly support, promote, or engage in any betting activities on any platform, website, or forum.
• The Bank has not evaded any GST payments and is fully compliant with all GST regulations.
• The Bank follows all regulatory guidelines for onboarding program managers and merchants. The onboarding process is handled by the relevant business teams, not by the MD & CEO. Additionally, merchants referred by program managers must already have an existing banking relationship with another bank to process UPI transactions.
• The Bank has not issued any fake invoices. All invoices are raised only for actual services used by program managers or merchants.
• The Bank has paid all GST dues related to its fees and revenue and complies with all related regulations.
• The Bank has a strong risk management and transaction monitoring system to oversee the use of Virtual Payment Addresses (VPAs) provided to merchants.
• The Bank does not maintain current accounts for program managers or merchants. Funds received through the VPA are settled into their designated accounts with other public or private sector banks.
• The Bank is actively engaging with regulators and stakeholders to maintain transparency and demonstrate its commitment.
• At present, the Bank does not expect any financial liability arising from this matter.
• The Bank’s operations continue as normal. All teams are working to ensure there is no disruption to customers, partners, program managers, or other stakeholders.

RBI’s Timeline

The bank added that the RBI has given 18 months to complete its transition into a Small Finance Bank. The Bank expects to complete this process within the given timeline.

Bank’s Further Step

The Bank added that it will further take appropriate steps in accordance with applicable laws and governance standards.