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RBI Imposes Sanction Restrictions on Bajaj Finance Limited
RBI Imposes Sanction Restrictions on Bajaj Finance Limited
The Reserve Bank of India (RBI) has issued an order to Bajaj Finance Limited, barring the company from sanctioning and disbursing loans under its two digital lending products: eCOM and Insta EMI Card. The RBI’s decision comes into effect immediately, following the company’s failure to comply with the central bank’s digital lending guidelines.
Key Fact Statement Deficiencies
A key reason for RBI’s action is the non-issuance of key fact statements to borrowers under these two lending products. The RBI also noted deficiencies in the key fact statements for other digital loans sanctioned by Bajaj Finance. These statements are crucial for ensuring transparency and informing borrowers of the critical terms of their loans.
Supervisory Restrictions Under Review
The RBI stated that these supervisory restrictions will remain under review until Bajaj Finance rectifies the deficiencies to the satisfaction of the central bank. This implies that the company will need to address the highlighted issues and demonstrate compliance with RBI’s digital lending guidelines to resume normal operations of these products.
RBI’s Regulatory Authority
The central bank’s directive falls under its powers granted by section 45L(1)(b) of the Reserve Bank of India Act, 1934. This move underscores the RBI’s commitment to enforcing regulations and safeguarding the interests of borrowers in the rapidly evolving digital lending landscape.
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