Now, PB Fintech-Owned Paisabazaar Under IT Lens For Regulatory Laxes, KYC Non-Compliance

PB Fintech, the parent company of insurtech platform Paisabazaar and Policybazaar, has come under the radar of income tax authorities for regulatory laxes and non-compliance with KYC requirements.

Moneycontrol reported, citing a senior government official, that PB Fintech is facing regulatory non-compliance regarding KYC issues. The income tax department has conducted a survey into the company, uncovering concerns related to regulatory lapses.

After reviewing the survey report, the Income Tax department is likely to initiate “assessment proceedings” to examine the income tax return filed by PB Fintech, according to the official.

Meanwile, PB Fintech said in an exchange filing, “With reference to our earlier communication dated December 14, 2023 regarding Income Tax survey with respect to our wholly-owned subsidiary Paisabazaar Marketing and Consulting Private Limited, we wish to inform that there is no new update in the said matter. The Company shall continue to provide any further details/information that might be required by the IT department.”

Recently, Singaporean sovereign wealth fund Temasek Holdings sold its entire 5.42% stake in PB Fintech via open market transactions. According to BSE block deals data, a Temasek entity named Claymore Investments (Mauritius) sold 24.4 Mn shares of PB Fintech at INR 992.8 per share, taking the combined deal value to INR 2,425 Cr.

PB Fintech turned profitable in the December quarter (Q3) of the financial year 2023-24 (FY24). The company reported a profit after tax (PAT) of INR 37.2 Cr during the quarter under review, while it had reported a loss of INR 21.1 Cr in the preceding September quarter.

PB Fintech’s total operating revenue jumped 43% to INR 871 Cr in the reported quarter from INR 610 Cr in Q3 FY23. However, this was a marginal rise on a quarter-on-quarter (QoQ) basis from INR 812 Cr in Q2 FY24.

Revenue of its core online business, which includes PolicyBazaar and Paisabazaar, grew 39% year-on-year (YoY) to INR 593 Cr in Q3 FY24. This vertical’s contribution margin also improved to 44% in the quarter.

This comes at a time when fintech major Paytm has been facing regulatory challenges. Last week, the RBI barred Paytm Payments Bank from taking any deposits or credit transactions or top-ups in any of its customer accounts. The central bank also stopped Paytm Payments Bank from providing any other banking services, such as UPI facility and fund transfers after February 29, 2024.

A group of entrepreneurs has written to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and the RBI governor Shaktikanta Das, urging them to “review” and “reconsider” the regulatory directive for Paytm’s banking unit.