The Directorate General of Goods and Services Tax Intelligence (DGGI) may soon recommend an investigation by the ED into some online gaming transactions connected with Fino Payments Bank after it detected several instances of suspected money laundering, The Economic Times reported, citing people familiar with the matter.
This comes after the DGGI found many cases of funds being routed through multiple accounts or entities to obscure their origin, necessitating deeper scrutiny under anti-money laundering laws, people familiar with the matter told ET. The matter is connected to an ongoing investigation into alleged GST evasion related to online betting applications involving transactions totalling around Rs 10,000 crore.
Fino Payments Bank issues clarification
After the sharp fall in the share price, Fino Payments Bank issued a statement clarifying that it is currently not subject to any investigation by any authority other than DGGI Hyderabad in this matter. “The bank reiterates that it does not directly or indirectly engage in or promote any gaming or betting activities through any platform, website or channel,” it added.
The lender further said that it continues to fully cooperate with the relevant authorities and remains committed to the highest standards of governance, regulatory compliance and transparency expected of a regulated financial institution.
Earlier, Rishi Gupta, Managing Director and Chief Executive Officer of Fino Payments Bank, was arrested on February 27 under provisions of the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) Acts.
The lender had then clarified that the investigation pertains to a business partner and is not related to its own GST compliance. Following Gupta’s arrest, the payments bank appointed its Chief Financial Officer, Ketan Merchant, as interim CEO.
Recently, Fino Payments Bank received the Reserve Bank of India’s in-principle approval for conversion into a small finance bank, making it the first among its peers to do so. Fino, the only publicly listed entity in the payments bank space, will be allowed to lend after the conversion, something payments banks are currently not permitted to do.
Fino Payments Bank shares hit a fresh 52-week low of Rs 136.35 apiece on Monday before recovering some losses after the clarification.
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