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The case is aimed at providing students with an opportunity to understand various aspects of corporate governance and the consequences of poor corporate governance. The case addresses the following objectives: The students need to assess the role of the board in implementing corporate governance. The students should be able to explain the conflicts experienced by various stakeholders in an organization. The students need to evaluate the balancing act of growth and governance in a startup. The students should be able to determine the current state of business sustainability of the high-growth startups in India.

The case presents the challenges faced by the CEO of BharatPe, Suhail Sameer. Beginning in 2022, Bharatpe was in deep trouble as there were allegations of financial mismanagement, toxic work culture and widening losses. Co-founder Ashneer Grover and his wife Madhuri had to leave the company following charges against them. As Grover was the face of the company, Sameer would have to quickly act on filling the void and reassuring investors. Because of the uncertainty, scores of employees had already quit or were looking for other jobs. Questions were also raised about the board’s inaction and lack of proactive measures. After a meteoric rise for three years, BharatPe was struggling to survive the whole episode and put its focus back on business.

The case is intended for MBA students in corporate governance, organizational behaviour, business ethics and strategic management areas. As the case reveals the impact of poor corporate governance, it can also be used for executive training purposes on corporate sustainability, governance and leadership with a special focus on Indian startups.

Teaching notes are available for educators only.

CSS 11: Strategy.

The case study is designed to help students understand how the “growth at all costs” attitude can lead to compromised corporate governance in a start-up leading to disastrous implications for all the stakeholders. This case study aims to make students understand the components of the fraud triangle, the impact of financial fraud on various stakeholders, the role of venture capitalist (VC) investors and the importance of good corporate governance in start-ups. The case study presents an excellent opportunity for students to discuss the consequences of ignoring good governance in the pursuit of growth in a start-up. After analyzing the case study, the students shall be able to explain the concept of the fraud triangle and to be able to identify the motivation, opportunity and rationalization of financial irregularities in a start-up; analyze the impact of financial irregularities on various stakeholders; comprehend the business model of VCs and evaluate its influence on VC-funded start-ups; and appraise the importance of good corporate governance in start-ups.

The case study revolves around the confession of financial irregularities made by one of the cofounders of GoMechanic, a start-up headquartered in Gurugram, India. On January 18, 2023, Amit Bhasin confessed to financial irregularities in the company’s financial statements, leading to laying off 70% of the workforce of the company. GoMechanic had earlier raised close to US$62m [1] from maverick global investors including Sequoia Capital, Tiger Global, Orios Venture Partners and Chiratae Ventures, and was negotiating to raise Series D financing from the Japanese multinational SoftBank with aspirations to be a unicorn (start-up with a valuation of over $1bn). The confession led to a debate about the consequences of the “growth at all cost” culture being followed by start-ups as well as VCs. GoMechanic was not an isolated instance of a lack of governance in the start-ups. The confession had consequences not only for the GoMechanic but for the entire start-up ecosystem of India, which was the third largest in the world. Bhasin stated that the founders take full responsibility for the situation, and they were working on a plan which was most viable under the circumstances. However, it was not going to be easy to regain the confidence of the investors.

The case study is best suited for senior undergraduate- and graduate-level business school students and in executive education programs in courses such as corporate governance and ethics, private equity and entrepreneurial finance.

Teaching notes are available for educators only.

CSS 1: Accounting and finance

In the last 10 years, the global financial services industry has significantly benefited from fintech. As the Indian entrepreneurial ecosystem continues to change, more fintech-use case-driven firms are created, and more investors are supporting these enterprises. India is acknowledged as a powerful fintech centre internationally.

The goal of the current research is to comprehend the revolutionary landscape of the Indian financial system.

Methodology: The research methodology entails a thorough review of several research papers and government reports better to understand fintech's role in the Indian financial system. This requires examining the trends, regulations and technical breakthroughs driving the fintech ecosystem to present a comprehensive picture of its influence.

The present chapter indicates that the fintech industry is flourishing in India. Over the following years, technological improvements will fuel the market's continuous expansion and change how financial products and services are produced, distributed and used.

Purpose: The banking sector is facing a challenge in the quality of services rendered to the ultimate customers for the adoption of Fintech applications in an efficient way. Due to dynamic market conditions, it is difficult for the banks to win the heart of the customers. It can be done only by providing them with updated technological applications and excellent services. Here, service quality plays a major role in this regard. It acts as an optimum strategy for the service providers to attain the interest of their customers and change their perceptions towards the banks in a positive way by providing them satisfactory services. This chapter aims to critically analyse and assess the quality of banking services rendered for Fintech applications to the customers.

Design/Methodology/Approach: The study evaluated the preference for public/private banks for Fintech applications across various demographic factors. In this research, users of public or private banks have been considered as respondents who are using Fintech applications. The service quality of both banks has been measured using a service quality scale, i.e., SERVQUAL. With the help of the Questionnaire, data were collected from 100 respondents from Punjab State on a convenience sampling basis. The Chi-square method was used to check the preference for different types of banks across demographic profiles.

Findings: ‘Responsiveness’ and ‘Tangibles’ are the most significant service quality dimensions. The present study revealed that the preference towards public/private sector banks has no dependency on occupation but found dependence on age and education level.

Research Limitations/Implications: The present study merely concentrates on the banking sector’s service quality towards Fintech applications. It could be used for the security market, insurance and other sectors in the future period. The present study provides implications for future interdisciplinary research addressing the need for Fintech applications as Fintech has become the need of every industry.

Originality/Value: This study is conducted to explore the opportunities for Fintech in the banking sector vis-á-vis service quality. The authors anticipate that the current study will contribute to existing literature and thus become the reference for academicians, researchers and industry professionals.

Purpose: The goal of this study is to delve into the causes behind the Fintech sector’s rise in various areas and its prospects. Fintech is rapidly expanding because of government legislation, multiple schemes, consumer expectations, a cashless economy, digitisation, globalisation, innovation, and other drivers.

Need for the Study: Fintech firms are forming alliances with traditional financial organisations to stay afloat and compete. India is becoming a superpower regarding e-startups, especially unicorns. Many startups are undergoing initial public offerings (IPOs). Fintech is an emerging space in India, spreading its wings rapidly in every sector.

Methodology: This work is based on a literature review. It utilises secondary data from numerous research publications, magazines, newspapers, published reports, relevant websites, Forbes magazine articles, stories from The Economic Times, the RBI Portal, and information from StartupIndia, Assocham, and Pwc, among others, to develop a conceptual framework showing the growth drivers of Fintech.

Findings: The whole world has been affected severely due to COVID-19. Crisis always comes with some opportunity, and it is up to us how to turn the calamities into opportunities that further turn into innovation that has the power to lead the world. Fintech is that fruit that had been born normally but grew abnormally (tremendous growth) during the pandemic. Also, the roots are so deeper that they will flourish more and more. It has been found that the emergence of a cashless economy, ease of internet connectivity, etc., are the major factors that paved the way for growth for Fintech in India.

Practical Implications: This study contains the conceptual framework which can guide the stakeholders, policymakers, management teams, field experts, etc., in knowing about their area expertise and looking for improvement, if any.

Originality: There are many papers on the relationship between Fintech and financial inclusion, but this is the first study that builds the conceptual framework for the growth drivers of Fintech.

Indian Railways (IR) has been slow in innovation. The competition from other modes of transport has posed new challenges to IR. Railways worldwide have taken help from startups to develop innovative solutions to improve railway operations. Such collaborations have helped in leveraging the technical expertise of startups in domains which are non-conventional for railways to develop in-house. These collaborations have been made possible by funding startups through various investment channels.

This is an original piece of research holding the promise to position itself as a pioneering research to showcase the evolving role of Artificial intelligence (AI) in the Indian peer-to-peer lending (P2P) markets. The research effectively uses the holistic multiple case study design to highlight the phenomenon of how AI as the holy grail of investments is proving to be a game changer for the Indian P2P markets.

The study uses a unique research design and curates six Indian licensed Non-Banking Financial Company (NBFC)-P2P as exemplary cases to cull out unique contextual findings on how AI has penetrated the Indian P2P market and road ahead. The research is based on a total of 18 semi-structured interviews of six NBFC-P2P founders and 12 Fintech and P2P industry experts. These interviews were used as alternate sources of evidence for data triangulation along with within case analysis, cross-case analysis to achieve well-rounded results.

The findings have been propounded in the form of unique, context specific results achieved with a bouquet of six NBFC-P2P cases and supplemented through triangulation of data done through multiple industry experts. Findings indicate that AI has reached that tipping point in India.

There is a scope of further refinement of our results with a larger sample size. Therefore future researches could consider conducting a comprehensive study including all existing NBFC-P2Ps in the space.

The research builds perspective for improving the practice in many ways. It shows the way to the other P2Ps still stuck to manual underwriting and see merit in AI-driven processes. It would guide them to embrace new technology driven business models to enhance customer experience and champion service transformation by making financial processes faster and secure. It also highlights how some of the P2Ps are scaling up and improving their visibility and outreach through strategic partnerships.

The research would assist in creating awareness about the unique P2P sector and AI solutions for individual investors, particularly the “new to credit customers” and “thin file borrowers”. AI led initiatives in the P2P space validate a certain amount of sophistication thereby giving sanctity to the sector and would therefore enforce confidence in the minds of new age investors and borrowers.

This original research unravels avenues for novel and untraversed area in the Indian settings where paucity of extant literature and structured data highlighted a research gap and hence necessitated this study. AI as a form of disruptive innovation offering predictive intelligence to the Indian P2P space and empowering it with process efficiency, cost optimization and client engagement is definitely paving the way for an exponential growth in the Indian Fintech Industry.

Nowadays, the competition is not only emerging from within the banking sector, but nonbanking companies like nonbanking financial companies (NBFCs) and FinTech are also growing in size and numbers, offering innovative financial products and services, giving a stiff competition to Indian banks. Thus, this study aims to investigate whether competition from within and outside the banking sector enhances or reduces the financial stability of the banking industry.

The study uses Herfindahl–Hirschman index to measure market share and Z score to measure financial stability. The study further examines the role of NBFCs and FinTech companies in impacting the financial stability by introducing variables like innovation, cybercrimes, systemically important institutions, etc. Thereafter, panel regression has been applied.

Empirical results show a positive relation of market share with financial stability, implying that increased competition in the Indian banking industry erodes the market power, adversely affecting the profit margins which encourages banks to take more risk and which may impact financial stability. The study shows a positive impact of innovation on financial stability which implies that the competition is acting as an enabler for banks. The authors find a negative relation of systemic important NBFCs with financial stability. The authors observe a negative association of cybercrimes with financial stability, reflecting that competition emerging from FinTech sector has exposed banks to new risks.

The policymakers should make sure that the competition of banks with other financial institutions, such as FinTech sector, remains healthy; otherwise, it can jeopardize the entire financial system. It is for the policymakers to define a boundary for FinTech sector, as the development of this sector has exposed the banking industry to new kinds of risks potential to create financial instability. The banks should do a comprehensive check on the company to which it is granting loans, and the government should amend laws. Though big banks have huge potential, consolidations can pose challenges at a macroeconomic level.

FinTech firms are a new entrant in the financial world which are providing immense competition to the banking sector, and thus radically changing the entire financial system. Therefore, it is extremely vital to study and explore the role of NBFCs and the FinTech industry as the main variable to analyze bank competition, which to the best of the authors’ knowledge is completely missing in the previous studies.