India's Tech Sector Suffers 'Big Blow' As Paytm and BYJU's Face Crisis Amid Regulatory Scrutiny and Alleged Mismanagement: Report
According to a report, the Paytm crisis and BYJU's crisis have resulted in Indian tech sector suffering big blow. The companies are going through regulatory issues and alleged mismanagement.
Mumbai, March 7: The Reserve Bank of India restricted the services of Paytm Payments Bank Limited after finding out the issues related to non-compliance and concerns over material supervisory. On the other hand, the edtech major BYJU's was also alleged having irregularities and mismanagement. Due to these two major companies, the tech sector has reportedly suffered a major blow.
Amid ongoing regulatory concerns and alleged mismanagement, both these firms have been facing crisis. According to a report by CNBC, Paytm was once a fintech star in India but has been stuck into controversy since March 2022, when the company was told to stop onboarding new customers. Now, from March 2024, the company has been banned from accepting any new deposits in its accounts or digital wallet. Paytm Payments Bank Restrictions: RBI Governor Says Time Given Up to March 15 Is Sufficient for Paytm.
Paytm was recently fined Rs 5.49 crore under the anti-money laundering law and is reportedly being probed by the federal anti-fraud agency on alleged violations of foreign exchange laws. Paytm founder and CEO Vijay Shekhar Sharma also resigned from the PPBL board following the issues. Amid these ongoing crises, RBI Governor Shaktikanta Das said that Paytm had been given sufficient time until the March 15 deadline.
On the other hand, edtech major BYJU's has been going through series of alleged accounting irregularities and mismanagement. The report said that the BYJU's was once India's most valuable startup and now struggling to survive. The report highlighted that the edtech firm's valuation plummeted from $22 billion to $1 billion amid these issues. Facebook Layoffs 2024: Meta-Owned Facebook Messenger Cuts 50 Jobs as a Part of Reorganisation of Business.
The report said the Indian government ordered an inspection into the edtech major BYJU's related to the accounting practices and its finances. After these investigations and allegations on Paytm and BYJU's, their customers and investors may see things differently. The report mentioned that Bhavish Sood, Modulor Capital's general partner and former director of the Gartner consulting firm, also said that the sector will be permanently scarred due to the BYJU's developments and people will not see it as an isolated problem.
(The above story first appeared on LatestLY on Mar 07, 2024 04:05 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).