The audit will assess if BharatPe's senior executives are making proper internal disclosures about personal investments and check for conflicts, leading to a new code of conduct, one of the sources told Reuters.
BharatPe, which allows shop owners to make digital payments through QR codes, has come under intense investor and Indian media scrutiny after co-founder Ashneer Grover sought damages from Uday Kotak, head of Kotak Mahindra Bank, alleging that the bank declined financing for a personal investment.
Kotak Mahindra Bank has in turn alleged that Grover has used "foul" and threatening language towards its employees and reserved the right to take appropriate legal action against him, a legal document seen by Reuters shows.
Grover, Kotak and BharatPe did not respond to requests for comment on Thursday.
Another legal document related to the dispute shows that Grover, 39, alleged that Kotak bank turned down his and his wife's request for 5 billion rupee ($67 million) to invest in the initial public offering (IPO) of an Indian beauty products company at the "eleventh hour".
Kotak bank cited "very high lending rates" among the reasons for refusing financing, the second legal document shows.
The first source said that investors have expressed concerns about the damage to BharatPe's image, adding that it was in talks with consultants including PwC and Alvarez & Marsal to carry out an independent governance audit.
Alvarez & Marsal and PwC both declined to comment.
Grover has taken leave from BharatPe until the end of March as a result of the furore generated by his dispute with Kotak, both the sources said.
BharatPe lists Tiger Global, Sequoia Capital and others as "marquee investors", without detailing their stakes.
Tiger Global did not respond to requests for comment, while Sequoia declined to comment on BharatPe's planned audit.
BharatPe, which competes with apps such as SoftBank's Paytm and Google Pay in India's booming payments market, is valued at roughly $3 billion and a filing for an IPO could be made within 18 months, the first source added.
(Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Editing by Alexander Smith)
By Abhirup Roy and Aditya Kalra