DGGI Arrests Fino Payments Bank CEO, Court Grants 2-Day Custody in Betting Fraud Probe

The Directorate General of GST Intelligence (DGGI) is investigating a major multi-crore online betting fraud and has reportedly found the involvement of Fino Payments Bank and its CEO, Rishi Gupta, in onboarding dummy programme managers and shell entities linked to illegal online gaming operations. These details were presented by DGGI before a local court while seeking custody of Rishi Gupta for further questioning. A special judge for economic offences in Hyderabad granted the agency two days of custody to interrogate him regarding the case.

CEO Taken Into Custody for Questioning

Investigators took Rishi Gupta into custody on Monday for questioning as part of the investigation. According to officials, the custody period is scheduled to end on Tuesday evening. During this period, investigators examined the alleged role of Gupta and the bank in facilitating transactions related to illegal online gaming platforms.

Dummy Programme Managers Used to Onboard Shell Entities

According to DGGI, three entities were appointed as programme managers or resellers under Fino Payments Bank. However, investigations later revealed that these firms were dummy companies that were not actually functioning.

The three programme manager entities identified by investigators are: PS Rao Digital Solutions (OPC) Private Limited, Billexpress Solutions Private Limited, Powerfin Technology Private Limited.

DGGI alleged that these programme managers were used to onboard 36 shell entities through Fino Payments Bank, which was acting as a payment aggregator. Investigators also shared a list of eight additional suspected programme manager or reseller entities with the bank and sought further information from them.

Rs 3,000 Crore Transactions Linked to Online Gaming

Investigators claimed that transactions worth around ₹3,000 crore related to online gaming operations were routed through the bank via these dummy programme managers alone. These transactions were allegedly connected to illegal real-money online gaming platforms, and the funds were routed through the network of shell companies created by the syndicate.

Dummy Firms Linked to Online Gaming Platforms

During the investigation, officials identified two companies that were allegedly connected to online gaming platforms. These companies are: Oceanique Web Solutions Private Limited, Webwin IT Hub Solutions Private Limited.

Authorities conducted physical verification of these firms, which were reportedly linked to gaming websites and applications such as funinmatch360.com and Racejeet. However, investigators found that both companies were dummy entities and were not functioning at the registered locations.

Shell Firms Created to Hide Illegal Activities

DGGI alleged that several shell firms were created under the guise of legitimate merchants or resellers, but physical verification revealed that they were non-functional entities created only to facilitate illegal activities.

According to investigators, these companies were part of an organised syndicate involved in illegal real-money gaming platforms.

The syndicate allegedly used these shell companies to: Route large volumes of financial transactions, Hide the actual business operations, Suppress taxable turnover, Avoid paying GST on gaming services.

Investigators said that the syndicate provided gaming services without issuing proper tax invoices, which allowed them to hide transactions and avoid declaring taxable supplies in GST returns.

Allegations of Due Diligence Failure

DGGI also raised serious concerns regarding the bank’s failure to conduct proper due diligence while onboarding the programme managers and merchant entities.

According to the agency, the onboarding drive was allegedly encouraged to increase transaction volumes and generate fee-based income for the bank.

However, investigators said that the bank did not carry out important checks such as: Mandatory physical inspections, Audits of merchants, Risk monitoring and compliance checks. These activities were reportedly part of the bank’s responsibilities under its contractual powers as a payment aggregator.

Rs 28 Crore Taxable Services and GST Evasion Alleged

The agency informed the court that the taxable value of services provided to dummy or non-functioning merchants through the three programme managers between October 1, 2023 and September 30, 2025 was approximately ₹28 crore.

Investigators said that with an estimated transaction fee of about 0.75%, the total transaction value routed through these programme managers was around ₹3,000 crore. Based on this amount, authorities believe that 28% GST applicable on online gaming services may have been evaded.

Allegations Against Fino Payments Bank CEO Rishi Gupta

DGGI alleged that Rishi Gupta played a key role in selecting and approving the programme managers and partners associated with the bank.

Investigators claimed that the onboarding of these entities was carried out under his supervision and described the process as “active collusion” and “conscious facilitation” at the highest levels of management.

The agency further alleged that Gupta was the “mastermind behind the offence.” Officials also claimed that they faced obstruction when attempting to enter the bank’s premises to conduct investigations and record statements.

The investigation into the alleged ₹3,000 crore online gaming transaction network and possible GST evasion is ongoing, and authorities are continuing to examine the role of various entities connected to the case.

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