The Reserve Bank of India (RBI) on Wednesday directed Bajaj Finance to stop sanctioning and disbursing loans under its two loan products ‘Ecom’ and ‘Insta EMI Card’ with immediate effect. The news has seen the company’s shares fall this morning. Shares of Bajaj Finance were down 4 percent on Thursday morning at Rs. Opened at 6940. However, the company’s shares rose in early trading.
According to a statement issued by the central bank, “non-compliance by the company with the existing provisions of Reserve Bank of India’s digital loan guidelines, particularly in non-disclosure of key facts to customers under these two loan products and sanctioned by another company.” This action is necessitated by the flaws in key statements issued in relation to digital loans. These controls will be reviewed after rectification of deficiencies and to the satisfaction of RBI, the statement said.
The stock recovered after the fall
The share price of the company has seen a decline of more than 9 percent in the last one month. During the last 6 months, Bajaj Finance has returned more than 7 percent to positional investors. At the same time, the company’s shares have seen an increase of 5 percent in the past one year.
(with agency inputs)