Ashneer Grover, Shark Tank Judge, Co-Founder of BharatPe, PostPe, etc. dropped his papers on the 1st of March, 2022 striking at midnight. Understanding the pent-up angst of the ex Co-Founder against the company’s other half of a partner.
“…please put my Rs 4,000 crore on the table and take the key away from me.”
That’s what Ashneer Grover said in an interview with Moneycontrol last month and dropped his keys on the first day of March 2022.
The international reality TV show Shark Tank premiered in India in December 2021. It’s a reality program in which entrepreneurs propose their company ideas to investors (a.k.a. Sharks) in the hopes of raising funds. So far, the show has been a massive hit, drawing the attention of the Indian audience. And, of course, the folks spotlighted have been in the forefront as well. But none more so than the gentleman we mentioned earlier, Ashneer Grover.
Ashneer Grover, who is also the MD and co-founder of the FinTech Giant BharatPe, is a shark on the show. Grover earned ample fame as a byproduct of the popularity of Shark Tank. But, like a boomerang, negative press swiftly trailed him! Grover is supposedly heard verbally attacking a bank employee in a leaked audiotape, which sparked it all. Then there were reports of toxic work situations at BharatPe. Grover was soon sent on paid leave. It should have brought everything to a halt, right? That, however, did not occur. Rather, Grover and his wife were accused of being complicit in the misuse of funds at the business. An audit was ordered by the company. Grover was subsequently asked to leave – forever, as per reports. Grover retaliated by hiring a team of attorneys to represent him in court and gave a theatrical statement to Moneycontrol last month. In which he openly asserted that anyone attempting to force him out of the firm would have to pay him Rs. 4,000 crores – the value of his shares, he claimed.
Are we all up to date at this point? Awesome!
Something else was brewing in the shadows amid all of this hullabaloo. Something that had the potential to influence the events of 2019.
But hold on a second, BharatPe is a QR code provider, a Buy Now Pay Later (BNPL) firm, and a Peer-to-Peer (P2P) financing platform, among other things. Is it, however, a bank?
Yes and no, to be honest!
Confused? Give us a hear!
Something interesting happened in June 2021. The Reserve Bank of India (RBI) eventually awarded a fresh banking license after a six-year wait. Who won the jackpot? BharatPe, of course. Along with the larger and more well-known Centrum Financial Services, the then just 3-year-old payments firm had applied for the license. Unity was the name of their joint venture. Although, this joint venture couldn’t function as a complete bank like HDFC or ICICI. Rather, it gave them the power to run a Small Finance Bank (SFB). What exactly is the dichotomy? Let’s simply say SFBs were designed to help India’s underdeveloped sections. However, they had complete control over deposits and lending. So, it is a banking license in every meaning of the word.
Does the name Punjab and Maharashtra Cooperative Bank (PMC) ring a bell? This was the cooperative bank that went down in 2019. Everything was fouled up: fraudulent accounts, dodgy loans. The Reserve Bank of India (RBI) had no choice but to intervene and put stringent constraints on the amount of money, customers could withdraw from their accounts and the bank’s capacity to work. Regular folks, on the other contrary, received the short end of the stick when they realized they couldn’t retrieve their savings.
As a result, RBI requested Unity Bank to combine with PMC and tidy up the situation in return for the banking license. They had to compensate depositors who had been left out in the cold. Everyone exchanged handshakes, and the license was due at any moment.
Perhaps it may not amount to that. Remember how we mentioned BharatPe wasn’t truly a bank before?
Well, we claimed that since the principal candidate was awarded a small finance bank license. Centrum, not BharatPe, was the culprit. Centrum also owns a 51% share in Unity Small Finance Bank. Grover isn’t even on the board of directors at this new bank. So there were hopes that RBI may turn a blind eye in this case.
Bottom line — The Ashneer Grover controversy has implications for many stakeholders in the ecosystem and we will have to wait and see how things pan out.
Inspired by a simple goal — making insurance more affordable and accessible for everyone.
As much as everyone would like to see Ashneer not leave BharatPe, the damage is done. But hey, you can stop the one approaching you by insuring yourself against all odds, right? Ditto!