RBI lifts restrictions on Bajaj Finance’s eCOM, Insta EMI card

Relaxation for Bajaj Finance: Bajaj Finance announced on Thursday that the Reserve Bank of India (RBI) has lifted restrictions on its lending products, enabling it to resume sanctioning and disbursing loans in previously banned business segments.

Following the ban imposed in November, shares of the non-banking lender had declined by nearly 5 per cent, contrasting with the nearly 11 per cent surge in the Nifty Financial Services index during the same period.

The central bank had prohibited Bajaj Finance from issuing loans under its eCOM and Insta EMI Card lending products, citing deficiencies in adhering to digital lending guidelines. Specifically, Bajaj Finance had failed to provide essential information to borrowers under these two products, as per the RBI's assessment.

Last week, Bajaj Finance confirmed that it had implemented the necessary regulatory changes and requested the RBI to lift the restrictions.

Vinit Bolinjkar, head of research at Ventura Securities, remarked, "The development is quite positive for Bajaj Finance's business, especially considering the temporary absence of a competitive player like Kotak Mahindra Bank from the market." 

Kotak Mahindra Bank had recently been barred by the RBI from acquiring new customers via its online and mobile banking channels and issuing new credit cards due to deficiencies related to information technology.

Bolinjkar added, "It is likely that Bajaj Finance will heavily reinvest in these products and aggressively strive to regain market share."

(With Reuters inputs)