The CEO and Managing Director (MD) of Fino Payments Bank, Rishi Gupta, was arrested by tax authorities on allegations of violating Goods and Services Tax (GST) laws. Following the arrest, the bank's stock prices fell by over 7% on the preceding Friday, indicating investor concern, and all eyes will be on how the stock reacts when markets reopen on Monday. The bank has since called for a special meeting to ensure continued operations, appointing Chief Financial Officer Ketan Merchant as the interim head.

Authorities arrested Gupta under provisions of the CGST and SGST Acts of 2017. In response, Fino Payments Bank clarified that Gupta's arrest is not linked to the bank’s compliance with GST, but rather concerns the dealings with the bank's business partners. This distinction suggests that while the case may bring challenges, it may not necessarily impact the bank's operational standing or compliance directly, mitigating some investor fears that typically accompany such high-profile arrests.

As the market awaits further developments, investors are likely to be on edge, analyzing the implications of this incident on the bank's future, the stability of its stock, and the overall investor sentiment in the financial sector. The company’s proactive measures in leadership changes could also reflect an attempt to maintain investor confidence amid the turmoil.