Bajaj Finance Share Price Rises After RBI Lifts Restrictions


by Sandip Das on 3 May 2024,  3 min read


Bajaj Finance‘s stock price jumped over 7 percent in the morning session on May 3, 2024 after the Reserve Bank of India (RBI) announced the lifting of restrictions on two of Bajaj Finance’s digital lending products, namely ‘eCOM’ and the online ‘Insta EMI Card’, with immediate effect. This development marked a crucial turning point for the company, prompting a bullish stance from various brokerages and instilling confidence in investors.

The lifting of restrictions by the RBI was a welcome surprise for market observers, particularly considering that it occurred in less than six months since the initial imposition of restrictions. This swift resolution was perceived as a positive indicator of regulatory cooperation and a signal of confidence in Bajaj Finance’s compliance efforts.

The decision to lift the restrictions was confirmed through an official exchange filing made by Bajaj Finance on May 2, 2024. The company expressed its readiness to resume the sanction and disbursal of loans in the affected business segments, including the issuance of EMI cards. This announcement brought relief to both the company and its stakeholders, indicating a return to normalcy in its digital lending operations.

The genesis of this regulatory intervention dates back to November 15, 2023, when the RBI directed Bajaj Finance to cease the sanction and disbursal of loans under the ‘eCOM’ and ‘Insta EMI Card’ products, citing non-adherence to digital lending guidelines. Specifically, the RBI highlighted concerns regarding the issuance of Key Fact Statements to borrowers and identified deficiencies in the statements issued for other digital loans sanctioned by the company.

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Bajaj Finance acknowledged the need for corrective action and initiated strategic changes to address the regulatory concerns. A crucial milestone in this journey was the announcement made by Bajaj Finance on April 25, wherein it disclosed the successful implementation of the required changes in its operations. This development was accompanied by a formal request to the RBI for a review and removal of the imposed restrictions.

The lifting of restrictions on the ‘eCOM’ and ‘Insta EMI Card’ products heralded a new chapter of growth and stability for Bajaj Finance. With regulatory hurdles overcome, the company could refocus its energies on expanding its digital lending portfolio and catering to the evolving needs of consumers. The reinstatement of loan sanctions and disbursal activities in the affected segments signified a resurgence of business momentum and paved the way for sustained growth in the future.

Bajaj Finance’s robust business model, coupled with its commitment to compliance and innovation, positions it favorably in the competitive landscape of digital lending.

Source: moneycontrol

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Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment.

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