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Bajaj Finance, a non-banking finance company (NBFC), experienced a nearly 4% decline in share price on Thursday. Following the Reserve Bank of India’s (RBI) directive to halt lending activities under two of its key products. The shares dropped to ₹6,937.15 apiece on the BSE.
RBI Intervention: ‘eCOM’ and ‘Insta EMI Card’ Lending Halted
The central bank instructed Bajaj Finance to cease the sanction and disbursal of loans under its ‘eCOM’ and ‘Insta EMI Card’ products immediately. The move was prompted by concerns regarding the non-issuance of Key Fact Statements (KFS) to borrowers and deficiencies observed in KFS for other digital loans. The regulatory filing by Bajaj Finance stated that these supervisory restrictions would persist until the identified deficiencies are rectified to the RBI’s satisfaction.
Company Response: Detailed Review and Corrective Actions
Bajaj Finance acknowledged that KFS were being issued for loans under the mentioned products but announced a detailed review of the KFS in response to RBI’s concerns. The company is committed to implementing corrective actions promptly. It assured stakeholders that the RBI’s actions would not have a significant financial impact, characterizing the issue as an operational breach rather than a major violation.
Limited Impact Expected, Analysts’ Perspective of Bajaj Finance Share
Although analysts anticipate short-term pressure on Bajaj Finance shares. They project a limited impact, considering the Insta EMI Card’s share is only 5% of the company’s total clients. Analysts view the situation as resolvable in the near future. It emphasizing as more of an operational lapse than a substantial violation. CLSA, a brokerage firm, predicts a 6% impact on Bajaj Finance’s profits during the ban.
Market Response: Share Price Trading Lower
At 9:30 am, Bajaj Finance’s share price was down by 2.00%, trading at ₹7,079.45 apiece on the BSE. The market awaits further developments as the company addresses the regulatory concerns raised by the RBI.
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