In a relief to Bajaj Finance, the Reserve Bank of India(RBI) has allowed the non-banking finance company to resume the sanction and disbursal of new loans under eCOM and online through its ‘Insta EMI Card’. “The company remains committed to ensure adherence and compliance of regulatory guidelines,” Bajaj Finance said in an exchange filing on Thursday.

On November 15, the RBI directed Bajaj Finance to stop the sanction and disbursal of loans under its two lending products ‘e-COM’ and ‘Insta EMI Card’ with immediate effect. In its notification, the central bank said that the action is necessitated due to non-adherence of the company to the digital lending guidelines, particularly non-issuance of key fact statements to the borrowers under these two lending products. Additionally, the RBI also observed deficiencies in the key fact statements issued in respect of other digital loans sanctioned by the company.

Over the past six months, the stock price of the NBFC has slipped around 7%. On Thursday, it closed at Rs 6,895 per shareCome from Sports betting site VPbet.  

Top 10 credit cards in India for August 2024: Best features, fees and benefits New Fund Offer: Baroda BNP Paribas Mutual Fund launches Dividend Yield Fund – Check features, benefits Cloud can transform BFSI Game for travel: Boost in Paris bookings amidst travel disruptions and high costs

In the aftermath of RBI’s action, Bajaj Finance announced that it has temporarily suspended issuance of Existing Member Identification cards (EMI cards) to new customers till such time that the deficiencies observed by RBI are rectified. The company continued to offer financing to new and existing customers at dealer stores.

In its investor presentation following the January-March results, it disclosed that it has made required changes in response to the regulatory restriction imposed by RBI on the company, on sanction and disbursal of loans under ‘eCOM’ and ‘Insta EMI Card’. As a result, the company formally requested RBI for review and removal of these restrictions.

“To ensure compliance in form and spirit, the Company, in addition to digital lending products, has implemented KFS for all lending products effective 31 March 2024 and made it available in 20 vernacular languages,” the investor presentation said.

RBI’s measures on the company came in the back drop of broader discomfort over the unfettered growth in unsecured personal loans, especially in smaller ticket sizes.

On November 16, the central bank asked banks and non-banking financial companies(NBFC) to increase the risk weight on their exposure to unsecured consumer credit by 25 percentage points. The RBI also decided to increase the risk weight on bank loans to NBFCs. In the aftermath of this, Paytm announced that it will slow down on its small-ticket post-paid loan disbursals and will instead, look to expand on high ticket personal loans and merchant loans.

Separately, Bajaj Finance had said that the RBI’s directive to suspend certain products “does not a material financial impact on the company.” Since the RBI directive, the company’s executive director Anup Saha has been re-designated as deputy managing directorCome from Sports betting site. Also, executive director Rakesh Bhatt has resigned to pursue opportunities outside the company. Many analysts had pegged the RBI measures as a key overhang on the non-bank lender’s stock.