The Payments Council of India (PCI), which represents digital payments companies, has written to finance minister Nirmala Sitharaman seeking urgent intervention and calling for greater proportionality in enforcement action.
On Friday, the Mumbai-based payments bank informed stock exchanges about Gupta’s arrest and announced the appointment of chief financial officer Ketan Merchant as interim head.
In its letter to the finance minister, PCI noted that regulated financial institutions operate across complex networks of merchants, technology partners and business correspondents. It added that attributing personal liability to senior leadership in matters linked to alleged third-party non-compliance carries significant implications for governance continuity.
“We believe it is important for the industry to articulate concerns around proportionality and governance continuity when supervised institutions and their leadership are involved. We have placed these considerations before the Honourable Finance Minister in a spirit of constructive engagement,” said Vishwas Patel, chairman, PCI.
“Details of the case remain unclear. Many fintech founders have raised concerns about the manner of the arrest, largely in their personal capacities,” said the founder of a fintech startup, requesting anonymity.
The episode has revived broader concerns within founder circles regarding GST enforcement practices. In January 2025, the Directorate General of GST Intelligence conducted searches at the premises of Policybazaar, operated by PB Fintech. InsuranceDekho was also raided around the same time.
On Saturday, T V Mohandas Pai, former CFO of Infosys, raised concerns on social media over alleged overreach by GST authorities. Sitharaman responded saying she was looking into the issue.
Several industry leaders, including Navin Surya, founder-chairman of the Fintech Convergence Council, Vishal Gondal of Goqii and Alok Mittal of Indifi, also expressed support for Gupta on social media.
A senior bank executive, who did not want to named, as the matter is sensitive, said the arrest came as a surprise. “There were discussions with GST officials through the day as part of the investigation. The late-evening arrest caught the entire organisation off guard,” the executive said.
Gupta has led Fino for nearly two decades, overseeing its transformation from domestic remittance firm Fino Paytech into a full-stack payments bank. In December, the bank received in-principle approval from the Reserve Bank of India to transition into a small finance bank — the first such instance in the country.
“Gupta also recently received regulatory approval for an extension of his term from the RBI, which reflects the regulator’s confidence in his leadership,” the executive added.
Beyond the immediate case, the episode has worried the fintech ecosystem about the personal criminal liability of senior executives in matters linked to vendor or intermediary compliance.
Payments banks and fintechs operate at the intersection of multiple regulators — the RBI, GST authorities, enforcement agencies and state administrations — often across vast last-mile distribution networks.
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