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Tag: Paisabazaar

  • Paisabazaar Receives Notices From The IT Department Regarding Vendor Payments

    The Income Tax Department has sent warnings to Paisabazaar, an insurtech platform owned by PB Fintech, about a few vendor payments and the organisations connected to them. The Assistant Commissioner of Income Tax and the Deputy Director of Income Tax in Delhi sent out the notices.

    According to the company’s regulatory filing, one of the notices is issued under section 142(1) of the Income Tax Act, 1961, and the other is issued under the Prohibition of Benami Property Transactions Act, 1988. The filing further stated that the authorities have requested information and explanations about the payments made to a small number of vendors and the organisations connected to them in relation to the transactions and services they rendered to Paisabazaar.

    Paisabazaar to Provide Payment Documentations

    According to PB Fintech, the notice mainly asks Paisabazaar to submit records and information pertaining to these payments. Additionally, it stated that it will take all required actions to make its case to the relevant authorities. According to the statement, the corporation will take all required steps to present and defend its case before the appropriate body because it is a notification that requests specific information and documents. The business gave stakeholders the assurance that it is answering the notices within the authorised time frames.

    Paisabazaar was Always Under the Vigil

    Income tax authorities became aware of Paisabazaar earlier this year due to regulatory laxities and non-compliance with KYC standards. The Securities and Exchange Board of India (SEBI), a market watchdog, issued a show-cause notice to Yashish Dahiya, the former CEO and chairperson of PB Fintech, in June of this year. The $2 million investment made by PB Fintech FZ-LLC, Dubai, in November 2022 to purchase a 26.72% share in the outsourced marketing services firm YKNP Marketing Management was the subject of the show cause notice (SCN).

    Concerns over a possible violation of insider trading laws were raised by the SEBI notice. PB Fintech responded by saying that the company’s operations and finances are unaffected by this problem. The business added that it is seeking legal advice in order to respond appropriately and handle the situation in compliance with legal standards. The business recently declared that, as of October 17, 2024, its board committees would be reorganised. Chairperson and CEO Yashish Dahiya resigned, while Nilesh Bhaskar Sathe and Kitty Agarwal, both independent directors, joined the audit committee, which was presided over by Kaushik Dutta.

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  • Expanding into Physical Locations, Paisabazaar Aims to Increase Secured Lending

    Listed PB Fintech subsidiary Paisabazaar, a digital credit marketplace, replicates sister company Policybazaar by creating a physical distribution channel of its own.

    In India, Paisabazaar is among the biggest platforms for credit transactions. Through online channels, it gives customers access to credit cards, unsecured personal loans, and other comparable products from banks and non-bank lenders. In order to facilitate the execution of such loan delivery, Paisabazaar hopes to establish a physical presence as it expands its secured credit distribution strategy.

    The chief executive officer of Paisabazaar, Naveen Kukreja, told a media outlet that the company has assembled a field team of over 100 employees in Delhi, Mumbai, and Bengaluru with the goal of focusing on secured credit products, including home loans and loans backed by real estate. Although they are still in the beta phases, it is also evaluating other products, such as loans secured by securities and automobiles. It plans to expand this team to 500 members by the end of the current fiscal year.

    Paisabazaar to Enhance Secured Credit

    In the near future, Paisabazaar hopes to raise the percentage of secured credit in its total disbursements from 15% of the previous fiscal year to 50%. It has already increased to 33% of all disbursals in the last several months.

    The company used to offer home financing as well, although customers had to check on its platform and usually closed the deal through the builders, the bank branch, or the real estate agent. With a physical presence now, the company intends to close that service delivery gap, according to Kukreja.

    This change in approach coincides with a moderation in Paisabazaar’s disbursals, which are essential to the company’s ability to generate income. In response to regulatory mandates, the broader ecosystem is moving towards secured products, and Paisabazaar is attempting to take a piece of that market.

    Quarterly Report

    Paisabazaar disbursed over 130,000 credit cards and INR 3,140 crore in loans in the first quarter of FY25. It had disbursed 140,000 credit cards and INR 3,542 crore in loans in the quarter that ended on June 30 of the previous year.

    Every institution develops a portfolio of both secured and unsecured assets as it expands. “We ultimately changed our approach six months ago when the RBI tightened the guidelines for unsecured credit,” according to Kukreja.

    Although Paisabazaar hopes to reach 50% of its disbursal volume with secured credit, the lower take rates, or fees, on secured loans mean that revenue profits will be lower. However, Kukreja stated that eventually, the business hopes to collaborate with lenders to develop products that will enable it to obtain residual income from its clientele.

    Expanding upon its broader financial services offering, Kukreja seeks to provide clients with a comprehensive financial wealth management choice by utilising account aggregator data and deep interfaces with several financial services platforms.

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