Bajaj Finance Ltd has been ordered by the central bank to stop providing loans under its two categories of products for alleged violation of digital lending rules.
The Reserve Bank of India (RBI) said in a statement today that Bajaj Finance, part of Bajaj Finserv Ltd, should stop providing loans under its “two loan products eCOM and Insta EMI Card” with immediate effect.
The RBI said it took the action after the company was allegedly found in violation of applicable provisions of the central bank’s digital lending guidelines.
“This action is necessitated by the company’s non-compliance with the existing provisions of the Reserve Bank of India Digital Lending Guidelines, particularly the failure to issue key fact statements to the borrowers under these two lending products and the deficiencies in the key fact statements issued in connection with other digital loans approved of the company,” 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 errors it had pointed out.
Bajaj Finance on its website says it has around 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-sized enterprises and commercial customers.