Bajaj Fin asked to stop two digital lending schemes

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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 non-adherenace to the digital lending guidelines.

In a statement, the RBI said “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.”

These  restrictions will be reviewed after the company takes steps to rectify the deficiencies, as required by the guidelines, RBI said.

To protect the interests of the borrowers, RBI had in August last year issued guidelines for digital lending. 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). The 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.

(With inputs from agencies)