In a major move against Bajaj Finance, the Reserve Bank of India asked the non-banking finance giant to stop sanctioning and disbursing loans under two of its products with immediate effect. The two lending products are 'eCOM' and 'Insta EMI Card.'
The action against Bajaj Finance was in exercise of its powers under section 45L(1)(b) of the Reserve Bank of India Act, 1934.
"This action is necessitated due to non-adherence of the company to the extant provisions of digital lending guidelines of Reserve Bank of India," the regulator said in a statement on Wednesday.
RBI flagged two issues—non-issuance of key fact statements to the borrowers under these two lending products and deficiencies in key fact statements issued in respect of other digital loans sanctioned by the company—for the action initiated against the NBFC major.
According to the company's website, the insta EMI card is a financing solution that allows a person to shop for a million products on no cost EMIs. With this card, a person gets pre-approved loan limit of Rs 2 lakh that can be used at Rs 1.5 lakh online and offline partner stores across 4,000 cities. There is also flexible repayment tenure of up to 60 months.
RBI said the supervisory restrictions will be reviewed upon the rectification of the said deficiencies to its satisfaction.
Bajaj Finance had reported a consolidated net profit of Rs 3,551 crore in the July-September quarter, up 28 per cent from a year ago. Its assets under management in the quarter surged 33 per cent to Rs 2.90 lakh crore. The number of new loans booked during the quarter rose 26 per cent to 8.53 million.
Bajaj Finance shares closed 1.8 per cent lower at Rs 7,223.95 on Wednesday, even as the broader BSE Sensex closed up over 1.1 per cent.