RBI removes restrictions on Bajaj Finance's eCom , Insta EMI cards

3 May 2024 , 10:42 AM

The Reserve Bank of India (RBI) has removed the restrictions on the two products offered by Bajaj Finance. These “eCOM” and the online digital “Insta EMI Card”. The restrictions have been removed with immediate effect.

This caused shares of Bajaj Finance to rise more than 7% in opening session on Friday. In November of last year, the central bank placed limitations on the approval and distribution of new loans under these two programmes.

In response to the positive news, Bajaj Finance shares started higher on the BSE at ₹7,350, up 6.8% from the previous closing price of ₹6,881. Maintaining its early gains, the market capitalization of the NBFC heavyweight surged to ₹4.51 lakh crore, shares were up 4.55% at ₹7,194.55 as of 10:36 a.m.

The nation’s most valuable NBFC company in terms of market capitalization stated in an exchange filing last night that the limitations were lifted by the central bank because of the corrective measures the company has implemented.

“The RBI has communicated its decision to lift the said restrictions on eCOM and online digital “Insta EMI Card,” with immediate effect, via its letter dated May 2, 2024, based on the corrective actions taken by the Company,” Bajaj Finance stated in a BSE filing.

The company stated that it would now start authorising and paying out loans in the aforementioned two business areas, along with issuing EMI cards. It continues, “The company is still dedicated to ensuring adherence and compliance of regulatory guidelines.”

Due to “non-issuance of key fact statements to the borrowers under these two lending products and the deficiencies in the key fact statements issued in respect of other digital loans sanctioned by the company,” the RBI banned the eCOM and Insta EMI Card on November 15, 2023.

“Necessitated due to non-adherence of the company to the extant provisions of Reserve Bank of India’s digital lending guidelines, particularly non-issuance of key fact statements to the borrowers under these two lending products and the deficiencies in the key fact statements issued in respect of other digital loans sanctioned by the company,” the RBI stated in its notification that this action was taken.

The company responded to the RBI action by stating that the loans recorded under the two lending products listed above were the subject of the key fact statement (KFS). But given the supervisory concerns expressed by the RBI, we will thoroughly examine the KFS and carry out the necessary corrective measures to the satisfaction of the RBI at the earliest,” it had said in the exchange filing.

Along with digital lending products, the corporation introduced KFS for all lending products starting on March 24 and made it available in 20 vernacular languages to ensure compliance in letter and spirit.

In a different development, Bajaj Finance has collected ₹1,371.25 Crore by assigning 1,36,350 secured redeemable non-convertible debentures (NCDs) at face value of ₹1 lakh each through a private placement. This was accepted on May 2, 2024, during the company’s debenture allotment committee meeting. It is suggested that the debentures be listed on BSE Limited’s Wholesale Market Segment.

For feedback and suggestions, write to us at [e-mail]