In a regulatory move, the Reserve Bank of India (RBI) on Wednesday (November 15) directed Bajaj Finance Ltd to immediately cease the sanction and disbursal of loans under its 'eCOM' and 'Insta EMI Card' lending products.

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The central bank's intervention comes in response to Bajaj Finance's non-adherence to the existing provisions of the RBI's digital lending guidelines.

"The Reserve Bank of India has today, in the exercise of its powers under section 45L(1)(b) of the Reserve Bank of India Act, 1934, directed Bajaj Finance Ltd to stop sanction and disbursal of loans under its two lending products ‘eCOM’ and ‘Insta EMI Card’, with immediate effect," the central bank said.

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A primary concern highlighted by the RBI is the company's failure to issue ‘key fact statements’ to borrowers under the specified lending products.

This lapse, coupled with deficiencies identified in the key fact statements related to other digital loans sanctioned by Bajaj Finance, has prompted the supervisory restrictions.

The RBI clarified that these restrictions will be subject to review only upon the rectification of the identified deficiencies to the satisfaction of the regulatory authority.

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In a regulatory filing, Bajaj Finance has reassured stakeholders that the recent directive from the RBI to cease the sanction and disbursal of loans under its 'eCOM' and 'Insta EMI Card' lending products will not have any material financial impact on the company.

In response to the supervisory concerns raised by the RBI, the company acknowledges that Key Fact Statements (KFS) are indeed being issued for loans under the specified lending products.

However, Bajaj Finance has expressed its commitment to address the regulatory concerns proactively. The company plans to conduct a detailed review of the Key Fact Statements and implement necessary corrective actions promptly.

Shares of Bajaj Finance Ltd ended at ₹7,223.95, down by ₹135.60, or 1.84%, on the BSE.

(Edited by : Shoma Bhattacharjee)

First Published:Nov 15, 2023 5:49 PM IST