RBI approved 3-month extension for Ketan Merchant as interim CEO of Fino Payments Bank effective May 27, 2026. Extension follows March 2026 appointment after MD & CEO Rishi Gupta's arrest by GST officials in tax evasion case. Gupta voluntarily retired May 21, 2026, despite board's support. Fino Payments Bank shares closed at Rs 128.70, up 2.71% on BSE following announcement.

This development highlights RBI's supervisory role in payment bank governance during leadership transitions. Payment banks, licensed under 2014 guidelines, are restricted entities focusing on deposits up to Rs 1 lakh and remittance services without lending powers. The interim CEO arrangement demonstrates regulatory flexibility while ensuring operational continuity during investigations. Gupta's arrest in GST fraud case triggered 'fit and proper' concerns under RBI norms, though the board maintained his innocence. His voluntary retirement removes potential regulatory complications while Merchant's extended tenure provides stability. This reflects broader regulatory emphasis on payment bank compliance given their role in financial inclusion through digital payments and banking services to underserved populations. RBI's approval process for interim appointments shows supervisory oversight extends beyond licensing to ongoing governance monitoring. The case illustrates intersection of different regulatory frameworks - GST enforcement affecting banking sector leadership. Market response suggests investor confidence in continuity measures. Payment banks face unique regulatory scrutiny given their differentiated business model and systemic importance in India's digital payments ecosystem, making leadership stability crucial for operations.