The Reserve Bank of India (RBI) has taken a significant regulatory step by imposing restrictions on Bajaj Finance Limited, a non-banking financial company (NBFC), specifically targeting its eCOM and Insta EMI Card lending products.
The central bank cited the company’s non-compliance with digital lending guidelines as the primary reason for these measures.
RBI Imposes Restrictions On Bajaj Finance Limited
In a comprehensive statement, the RBI outlined the nature of the violations and emphasized that the imposed “supervisory restrictions” would undergo a thorough review once Bajaj Finance rectifies the identified deficiencies to the satisfaction of the RBI.
The regulatory intervention, carried out under the authority of section 45L(1)(b) of the Reserve Bank of India Act, 1934, mandates an immediate cessation of loan sanctioning and disbursal for the eCOM and Insta EMI Card products. The RBI underscored the importance of adhering to its digital lending guidelines, particularly in the issuance of Key Fact Statements to borrowers associated with these lending products.
The central bank expressed concern that Bajaj Finance Limited failed to furnish key fact statements, a crucial element of transparent and responsible lending practices, to borrowers utilizing the eCOM and Insta EMI Card facilities. Furthermore, the RBI pointed out deficiencies in the Key Fact Statements related to other digital loans sanctioned by the company.
Regulatory Issued By Bajaj Finance
The regulatory directive implies that Bajaj Finance must promptly address and rectify these identified shortcomings in its lending practices. The company is expected to align its operations with the stipulated digital lending guidelines of the RBI.
Importantly, the supervisory restrictions imposed on loan sanctioning and disbursal will only be lifted upon the RBI’s satisfaction with the corrective measures undertaken by Bajaj Finance.
This regulatory action underscores the RBI’s commitment to maintaining the integrity and adherence to guidelines within the financial sector, particularly in the rapidly evolving landscape of digital lending.
It serves as a reminder to financial institutions of the importance of complying with regulatory frameworks to ensure fair, transparent, and responsible financial practices.
The outcome of the review process will likely shape the future trajectory of Bajaj Finance’s lending operations and contribute to the broader discourse on regulatory oversight in the digital lending space.
