Fino Payments Bank has issued a detailed clarification following days of media reports linking it to an ongoing GST investigation involving certain program managers associated with multiple banks.
In an official statement, Fino Payments Bank said that the probe initiated by the Director General of GST Intelligence (DGGI) relates to certain program managers working with multiple banks, including Fino Payments Bank Limited, and does not concern the bank's own GST compliance. The bank emphasized that the investigation is not related to its internal tax practices. As the matter is currently sub-judice, the bank stated that it will limit further public comments.
The bank categorically denied evading any GST dues and reaffirmed that it remains fully compliant with GST regulations. It clarified that all invoices raised are based strictly on services utilized by program managers or merchants, dismissing allegations of fake invoicing. Fino Payments Bank also confirmed that it has duly paid GST on all fees or revenue earned and does not anticipate any financial liability at this stage.
Addressing governance and compliance concerns, the bank explained that onboarding of program managers and merchants is conducted by designated business teams in accordance with regulatory norms. The Managing Director and CEO are not involved in operational onboarding processes. As part of due diligence, merchants referred by program managers must maintain an existing banking relationship with another bank to enable UPI transactions. The bank further clarified that it does not open or maintain current accounts for program managers or merchants.
Operations, the bank said, continue as usual without disruption to customers or partners. It highlighted its robust risk management framework, particularly in monitoring merchant transactions through Virtual Payments Addresses (VPAs).
Separately, the bank noted that the Reserve Bank of India has granted it 18 months to complete its transition into a Small Finance Bank. Fino Payments Bank expressed confidence that the conversion process will be completed ahead of the stipulated timeline. The board and senior management are closely reviewing the developments and will provide updates through regulatory disclosures as required.
CAclubindia
