RBI directs Bajaj Finance to cease lending through ‘eCOM’ and ‘Insta EMI Card’
The banking sector regulator, the Reserve Bank of India (RBI), has taken action under Section 45L(1)(b) of the RBI Act of 1934 and mentioned that Bajaj Finance Limited must follow their instructions with “immediate effect”.
The directive was issued because of the “non-adherence” to the existing provisions of the RBI’s digital lending guidelines, the RBI said in a statement.
The RBI stated that the NBFC’s non-adherence to comply with the norms specifically involves “the 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 restriction placed on the two lending products will be “reviewed upon the rectification of the said deficiencies to the satisfaction of the RBI.”
In August of last year, the RBI introduced rules for digital lending to prevent fraud and illegal activities in the digital lending sector. These guidelines are meant to protect borrowers, and all digital lending platforms, including banks and NBFCs, must follow them.