Bajaj Finance Ltd has been ordered by the central bank to stop giving loans under its two categories of products for alleged violation of digital lending rules.
The Reserve Bank of India (RBI) in a statement today said that Bajaj Finance, an arm of Bajaj Finserv Ltd, should stop giving loans under its “two lending products eCOM and Insta EMI Card” immediately.
The RBI said it took the action after the company was allegedly found violating extant provisions of the central bank’s digital lending guidelines.
“This action is 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,” the RBI said in the statement issued by its Chief General Manager Yogesh Dayal.
The RBI said it will review the decision after Bajaj Finance corrects the flaws it had pointed out.
Bajaj Finance on its website says it has some 63 million customers. It is an RBI-registered deposit-taking non-banking financial company (NBFC) and is classified as an ‘NBFC-Investment and Credit Company’, which can lend money and take deposits across a diversified lending portfolio in retail, small and medium enterprises and commercial customers.