Fino Payments Bank said in its regulatory filing that its planned conversion into a small finance bank is progressing within the central bank’s 18-month timeline.
The Reserve Bank of India had granted the payments bank an “in-principle” approval in December last year to convert into a small finance bank, a move that would allow Fino to accept larger deposits, offer loans and credit facilities.
Fino Payments Bank under scrutiny after CEO arrest
The update comes amid the bank is facing scrutiny linked to a tax probe that has led to the arrest of its CEO on March 2.
Fino Payments Bank said on March 2 that its managing director and CEO Rishi Gupta was arrested under the country’s goods and services tax law in an investigation involving the lender’s business partners. The bank has said the arrest was not linked to its own GST compliance.
Chief Financial Officer Ketan Merchant is overseeing operations in Gupta’s absence.
Fino Payments Bank denies links with shell companies
Fino Payments Bank also clarified that it is not associated with any shell companies as merchants or program managers. It also said that no such companies are part of its group.
Fino Payments Bank said it follows proper due diligence and Know Your Customer (KYC) norms while onboarding any program manager or merchant. It stressed that it has not bypassed any KYC or due diligence processes in the cases being discussed.
The bank further said it has not onboarded any merchant or program manager registered outside India.
No fake invoices, no financial liability foreseen
Fino Payments Bank also denied issuing any alleged fake invoices. It said all invoices were raised based on services utilised by program managers or merchants.
The bank added that it does not foresee any financial liability at this point arising from the matter. It maintained that its operations and business continue as usual.
Fino Payment Bank Share price
The share price of Fino Payment Bank is down 2.32% in the intra-day trading session.