DGGI probe into banned online gaming leads to Fino Bank arrest: Sources

Finance Ministry sources say probe has flagged GST evasion, shell entities and payment aggregators in alleged banned online gaming operations, leading to arrest of a senior bank official

An investigation by the Directorate General of GST Intelligence (DGGI) into alleged banned online money gaming has led to the arrest of a senior bank functionary in the Fino Payments Bank case, sources said.

 

According to initial findings shared by Finance Ministry sources, the DGGI is probing suspected goods and services tax (GST) evasion of several crores linked to online money gaming activities, which are stated to be banned.

 

“In the Fino Payments Bank case arrest, DGGI is investigating a case of online money gaming, which is banned,” the sources said.

 

The preliminary probe indicates the use of multiple shell and non-existent entities, along with payment aggregators, to allegedly funnel proceeds generated from the online gaming operations under scrutiny, bypassing standard regulatory checks.

   

Sources added that the investigation conducted so far has revealed the involvement of a senior bank functionary in the alleged fraud, following which the individual has been placed under arrest. This has been identified as a key element establishing internal links in the early findings.

 

Officials described the findings as part of the early stage of the ongoing DGGI probe and emphasised that the details reflect initial investigation inputs only, with further developments possible as the case progresses.

 

Fino Payments Bank had earlier disclosed in a regulatory filing to stock exchanges that its Managing Director and Chief Executive Officer, Rishi Gupta, was arrested under Sections 132(1)(a) and 132(1)(i) of the CGST and SGST Acts, 2017. Section 132(1)(a) pertains to the supply of goods or services without issuance of an invoice, or issuance of false invoices with intent to evade tax. Section 132(1)(i) relates to wrongful availment or utilisation of input tax credit.

 

The lender said the investigation pertains to a business partner and not to its own GST compliance, and that Chief Financial Officer Ketan Merchant has been tasked with overseeing day-to-day operations, with normal banking activities continuing uninterrupted.