Bajaj Finance shares jump 7% after RBI lifts ban on eCOM, Insta EMI Card

Shares of Bajaj Finance rose over 7% in opening trade on Friday after the Reserve Bank of India (RBI) lifted the restrictions on the non-banking financial company’s (NBFC) two products ‘eCOM’ and online digital ‘Insta EMI Card’, with immediate effect. The central bank had imposed restrictions on the sanction and disbursal of new loans under these two products in November last year.

Cheering the news, Bajaj Finance shares opened higher at ₹7,350, up 6.8% against the previous closing price of ₹6,881 on the BSE. Extending opening gains, the NBFC heavyweight rose as much as 7.5% to ₹7,400, while the market capitalisation increased to ₹4.51 lakh crore.  The stock touched its 52-week high of ₹8,190 on October 6, 2023, and a 52-week low of ₹6,185.45 on May 4, 2023.

In an exchange filing last evening, the country’s most valued NBFC firm in terms of m-cap said the central bank removed the restrictions based on the remedial actions taken by the company.

“The RBI, vide its letter dated 2 May 2024, based on the remedial actions taken by the Company, has conveyed its decision of lifting the said restrictions on eCOM and online digital ‘Insta EMI Card’, with immediate effect,” Bajaj Finance said in a BSE filing.

As per the company, it would now resume sanction and disbursal of loans in the above two business segments including issuance of EMI cards. “The company remains committed to ensure adherence and compliance of regulatory guidelines,” it adds.

On November 15, 2023, the RBI imposed a ban on eCOM and Insta EMI Card 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, in its notification, had said that this action was “necessitated due to non-adherence of the company to the extant provisions of digital lending guidelines of Reserve Bank of India, 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”.

In response to the RBI action, the company had clarified that the key fact statement (KFS) was being issued for the loans booked under the above-mentioned two lending products. “However, based on the supervisory concerns raised by the RBI, we will undertake a detailed review of the KFS and implement requisite corrective actions to the satisfaction of the RBI at the earliest,” it had then said in the exchange filing.

To ensure compliance in form and spirit, the company, in addition to digital lending products, implemented KFS for all lending products effective Mar’24 and made it available in 20 vernacular languages.  

In a separate development, Bajaj Finance has raised ₹1,371.25 crore through the allotment of 1,36,350 secured redeemable non-convertible debentures (NCDs) on a private placement basis, at the face value of Rs 1 lakh each. This was approved at the meeting of the debenture allotment committee of the company on May 2, 2024. The debentures are proposed to be listed on the Wholesale Market Segment of BSE Limited.

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