Online insurance marketplace PolicyBazaar’s parent PB Fintech could soon face income tax assessment proceedings for alleged know-your-customer (KYC) non-compliance and associated regulatory breaches, senior government officials revealed.
Tax authorities conducted surveys of PB Fintech and subsidiary PaisaBazaar in mid-December examining vendor relationships. While details remain undisclosed, lapses reportedly centre around shoddy customer verification processes – a key determinant for an insurance platform’s integrity.
This is reported by MoneyControl.
Foreign Investors Exit, Profitability Aided by Renewals
The development comes even as PB Fintech witnessed multiple foreign investors like Temasek, Premji Invest and others selling stakes close to 5% each in the company over the past week. However, the firm returned its first ever quarterly net profit of ₹37 crore in Q3FY24 on the back of strong insurance renewals and margin improvement.
But allegations regarding slippages in mandatory identity establishment protocols during client acquisition can still attract stiff regulatory penalties if proven accurate. Tax probe outcomes and potential license impacts from business continuity or credibility perspective loom now.
Future Growth Prospects Face Uncertainty
As per analysts, regulatory troubles can singularly undo positive business metrics given trust forms the core pillar of an intermediation platform. With rivals also aggressively vying for market share, compliance shortcuts attempted during PB Fintech’s rapid scaling years seem catching up before critical mass gets attained.
Navigating policy headwinds amidst macro uncertainty already necessitated calibrating the operational strategy over coming fiscal as per the management. The latest allegations around foundational integrity casts further doubts regarding PB Fintech’s capability realizing its once rich promises.
