Fino Payments Bank extends interim CEO term by 3 months

What the RBI has approved

Fino Payments Bank said the Reserve Bank of India (RBI) has approved an extension of Ketan Merchant’s tenure as interim chief executive officer for a further three months. The approval was communicated through an RBI letter dated May 25, 2026, the bank said in a regulatory filing. The extension is effective from May 27, 2026. Merchant has been serving as the interim CEO following a leadership disruption linked to the arrest of the bank’s managing director and CEO, Rishi Gupta. The update matters for shareholders and customers because it clarifies who will lead the bank for the next quarter. It also signals continued regulatory oversight of governance at the lender.

How the decision reached the market

The bank said its board had approved extending Merchant’s interim CEO tenure, subject to regulatory approval, in a stock exchange filing made last week. That step has now been followed by the RBI’s formal go-ahead. The May 25 letter from the regulator provides the basis for the extension from May 27. The bank’s disclosures make clear that the interim arrangement remains time-bound. It also indicates that the bank is operating within a framework where key appointments and extensions require regulatory clearance.

Background: why the bank moved to an interim CEO

In March 2026, the RBI approved Merchant’s appointment as interim CEO for a period of three months after Gupta was arrested by GST officials. The bank has described the case as relating to a fraud matter connected to tax evasion. Merchant is the bank’s chief financial officer (CFO) and was asked to take charge to ensure leadership continuity. The RBI approval for the interim appointment was communicated via a letter dated March 6, 2026, according to the bank’s exchange filing. The appointment was effective from February 27, 2026, for three months or until Gupta resumes office, whichever is earlier.

Key terms attached to the interim appointment

Fino Payments Bank stated that Gupta’s return is linked to a reassessment of his “fit and proper” status. The reassessment is to be carried out by the bank’s Nomination and Remuneration Committee (NRC) and the board. The bank also said a final view is to be taken by the RBI. This framework is important because it means the interim arrangement is not only time-based but also tied to governance checks. Until those steps conclude and the regulator takes a view, the bank will continue under interim leadership.

Other leadership continuity steps disclosed by the bank

Alongside the interim CEO extension, the bank disclosed another continuity measure for the finance function. It said Anup Agarwal’s tenure as interim chief financial officer was extended for up to three months from July 6. The disclosures indicate the bank is seeking stability in senior management while regulatory and board-level reviews continue. With Merchant holding the interim CEO role and also being described as the CFO, the bank’s filings point to an unusual but temporary leadership structure.

Timeline of regulatory and board actions

The bank’s filings provide multiple dated checkpoints that outline how the interim arrangement has evolved from February to late May.

Context: small finance bank transition adds to governance focus

The disclosures come at a time when Fino Payments Bank has secured in-principle approval from the RBI to transition into a small finance bank (SFB). While the bank did not link the leadership changes directly to the SFB plan in operational terms, the timing increases the focus on governance and management continuity. Regulatory scrutiny is typically higher during transitions that change a bank’s operating model. In this context, a defined interim CEO tenure and explicit review steps for the existing MD and CEO position help set expectations for stakeholders.

Market and investor relevance

The immediate investor takeaway is that the regulator has ensured continuity in the CEO role for a further three months from May 27, 2026. For customers and counterparties, the filings aim to reduce uncertainty by clarifying who is responsible for day-to-day leadership. For shareholders, the disclosures also highlight that the bank’s board and committees are involved in governance processes, with the RBI retaining the final say on key outcomes. The bank has not provided a date for a final decision on Gupta’s status in the disclosed text. As a result, the interim framework, and periodic extensions where needed, become the practical mechanism to maintain operational stability.

What to watch next

Fino Payments Bank has indicated that the NRC and board will review Gupta’s eligibility, and the RBI will take a view thereafter. Until that process concludes, the bank will continue under interim arrangements approved by the regulator. The next confirmed milestone from the disclosures is the start date of Merchant’s extended interim CEO term from May 27, 2026, and the interim CFO extension window beginning July 6. Any further changes, including whether Gupta resumes office or whether a longer-term leadership decision is taken, would likely be communicated through future regulatory filings.