Gaming transactions involving Fino Bank could face ED probe

New Delhi: The Directorate General of Goods and Services Tax Intelligence (DGGI) could quickly suggest an Enforcement Directorate (ED) probe into on-line gaming transactions linked with Fino Payments Bank Ltd, following detection of a number of cases of suspected cash laundering, stated folks with information of the matter.

Investigators discovered many circumstances of funds routed by means of a number of accounts or entities to obscure their origin, necessitating a deeper scrutiny below the anti-money laundering legislation, they stated. The matter is linked to an ongoing investigation into alleged GST evasion associated to on-line betting functions involving transactions totalling round ₹10,000 crore.

Fino Bank challenged the arrest of Rishi Gupta in Telengana excessive Court. The court docket heard the matter and has reserved its order on March 17.

Counsel for Gupta submitted earlier than the court docket that Fino Payments Bank operates solely as a funds and banking platform, offering infrastructure for transactions with out being chargeable for the tax compliance of sellers or consumers. The financial institution has additionally paid the GST demand raised by the division.

In December 2025, Fino Payments Bank obtained in-principle approval from the Reserve Bank of India to transform right into a small finance financial institution. Following Gupta’s arrest, the funds financial institution appointed its chief monetary officer, Ketan Merchant, as interim CEO.

The DGGI is prone to suggest submitting of Enforcement Case Information Report (ECIR), which is a proper report akin to a primary info report filed by police when a criminal offense is reported, triggering an in depth investigation by the ED, in response to the folks. “Based on the transaction patterns and the movement of the proceeds, it triggered a wider probe,” a senior official informed ET, requesting anonymity.

However, Fino Payments Bank stated in response to ET’s question, “The assertion that the ongoing DGGI investigation may expand to include alleged violations under the Prevention of Money Laundering Act (PMLA) or involve the Enforcement Directorate is incorrect and speculative. As we have consistently disclosed in our exchange filings, the bank is currently not subject to any investigation by any authority other than the Director General of GST Intelligence.”It additional stated that it is very important make clear that the DGGI’s inquiry is in relation to sure programme supervisor(s) or retailers related to a number of banks, together with Fino Payments Bank, and isn’t directed on the GST compliance of the financial institution itself.

“The bank is extending its full cooperation to the authorities and is providing all relevant information pertaining to the program manager(s) / merchants in question,” it stated.

The funds financial institution added that it’ll maintain the exchanges and stakeholders knowledgeable of fabric developments within the matter.

According to the official cited earlier, DGGI investigators imagine that the presence of a number of shell firms and dummy programme managers controlling onboarding of retailers requires an in depth examination by the ED into how funds had been layered, hid or moved in violation of the PMLA. Investigators allege that giant volumes of funds had been processed by means of Fino Payments Bank’s platform with out correct tax compliance and that dummy retailers had been onboarded to facilitate gaming companies with out invoices. “The investigation is continuing and may take time… A detailed report will soon be sent to the finance ministry on the findings so far,” the official stated, with out divulging additional particulars.

The case drew public consideration after the Navi Mumbai-headquartered funds financial institution’s chief government Rishi Gupta was arrested final week by the Hyderabad unit of the DGGI.

Counsel for Gupta submitted earlier than the court docket that Fino Payments Bank operates solely as a funds and banking platform, offering infrastructure for transactions with out being chargeable for the tax compliance of sellers or consumers. The financial institution has additionally paid the GST demand raised by the division.