Published 09:23 IST, March 6th 2024

JM Financial affirms loan sanctioning integrity following RBI action

The RBI had barred the unit from granting loans against shares and debentures.

Reported by: Business Desk
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RBI | Image: ANI
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JM Financial in focus: Investment banking firm JM Financial said there were no deficiencies in its unit's loan sanctioning process following the Reserve Bank of India's (RBI) recent action.

The RBI had barred the unit from granting loans against shares and debentures.

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In response, a spokesperson stressed that JM Financial Products had not violated applicable regulations and maintained that there were no governance issues. 

The company affirms its commitment to conducting all business and operational affairs in a bona fide manner.

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The RBI cited regulatory violations and governance concerns as grounds for its action against JM Financial Products. 

The central bank's review revealed instances where the company facilitated a group of customers in bidding for various initial public offering (IPOs) and non-convertible debenture (NCDs) offerings using loaned funds.

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The RBI's heightened oversight of banks and non-bank finance companies aims to ensure compliance with regulatory norms and safeguard customer interests. 

Additionally, the central bank recently directed non-bank finance company IIFL Finance to cease offering gold loans due to "material supervisory concerns" in its gold loan portfolio, resulting in a 20 per cent decline in its shares on Tuesday.

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As of 9:20 am, shares of JM Financial were trading 14.6 per cent lower at Rs 81.57 per share.

(With Reuters Inputs)

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09:23 IST, March 6th 2024