The Reserve Bank of India (RBI) on November 15 asked Bajaj Finance to stop sanction and disbursal of loans under its two lending products with immediate effect. As per a notification issued by RBI, Bajaj Finance has been asked to stop issue loans under ‘eCOM’ and ‘Insta EMI Card’ lending products.
The central bank said that the action has been taken for non-adherence 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 action has been taken under section 45L(1)(b) of the Reserve Bank of India Act, 1934, a press released by the RBI said.
RBI added that these supervisory restrictions will be reviewed upon the rectification of the said deficiencies to the satisfaction of it.
In August last year, RBI had issued digital lending guidelines in a bid to crack down on frauds and unlawful activities in the digital loans segment. The guidelines comprise norms to protect the borrowers. Digital lending platforms including banks and NBFCs are required to comply with these guidelines.
The ‘eCOM’ service of Bajaj Finserv offers e-commerce business loans, while the ‘Insta EMI Card’ lets buyers to buy products from e-retail sites on EMI.