The Reserve Bank of India (RBI).
Credit: Reuters File Photo
Mumbai: The Reserve Bank on Wednesday directed Bajaj Finance to stop sanction and disbursal of loans under its two lending products -- eCOM and Insta EMI Card with immediate effect due to the non-adherence of the company to the extant provisions of digital lending guidelines.
"This action is necessitated due to non-adherence of the company to the extant provisions of Digital lending guidelines of the 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 a statement.
These supervisory restrictions will be reviewed after the rectification of said deficiencies to the satisfaction of the RBI, the central bank added.
In August last year, the Reserve Bank issued guidelines on digital lending with an aim to protect the interest of borrowers. The regulatory framework is focused on the digital lending ecosystem of RBI Regulated Entities (REs) and lending service providers (LSPs) engaged by them to extend various permissible credit facilitation services.
Earlier in January 2021, the central bank constituted a working group on digital lending, including lending through online platforms and mobile apps (WGDL).
Pune-headquartered Bajaj Finance has reported a 28 per cent rise in its consolidated net profit to Rs 3,551 crore for the second quarter ended September 30.