The Reserve Bank of India (RBI) has officially lifted restrictions on two digital lending products of Bajaj Finance, nearly six months after imposing curbs due to non-compliance with its digital lending guidelines.
The announcement, made in a regulatory filing by Bajaj Finance, noted that effective immediately, the company can resume sanctioning and disbursing loans through its eCOM and Insta EMI Card services.
The RBI initially halted Bajaj Finance’s offerings of these products in November of the previous year.
The central bank’s directive pointed to the company’s failure to adhere to certain aspects of the digital lending guidelines, specifically the non-issuance of Key Fact Statements (KFS) to borrowers.
The deficiencies noted in the KFS for other digital loans offered by Bajaj Finance further compounded the issue.
In response to the RBI’s concerns, Bajaj Finance undertook remedial actions to align its services with the regulatory standards prescribed by the RBI.
On May 2, 2024, the RBI acknowledged these corrective measures by revoking the restrictions, allowing the company to continue its digital loan operations.
Following the RBI’s decision, Bajaj Finance expressed its commitment to maintaining compliance with regulatory guidelines, emphasizing the resumed issuance of EMI cards and the continuation of loan services in the affected business segments.
The news of the lifted restrictions spurred a significant but brief surge in Bajaj Finance’s stock price, which climbed 7.54% to ₹7,400 in morning trading on the Bombay Stock Exchange (BSE).
Despite later relinquishing much of these gains amidst broader market pressures, the stock closed the day up by 0.75% at ₹6,932.80. Similarly, on the National Stock Exchange (NSE), the stock settled at ₹6,927, marking a 0.64% increase after an initial jump of 7.51%.
Shares of Bajaj Finserv, another entity under the same corporate umbrella, also experienced a modest increase, rising 0.69% to settle at ₹1627.10 on the BSE.
This development comes shortly after the RBI imposed restrictions on Kotak Mahindra Bank, barring the bank from onboarding new customers via its online and mobile banking channels and issuing new credit cards.