The Reserve Bank of India (RBI) on Wednesday directed Bajaj Finance Ltd. to stop sanction and disbursal of loans under its two lending products ‘eCOM’ and ‘Insta EMI Card’, with immediate effect. This action is necessitated due to non-adherence of the company to the extant provisions of digital lending guidelines of 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, the RBI said. These supervisory restrictions will be reviewed upon the rectification of the said deficiencies to the satisfaction of the RBI, it said. For the borrower to proceed with the loan executing contract, a standardised key fact statement (KFS) must be produced, according to the RBI rules. KFS is mandatory to be shared with customers and will outline details of annual percentage rate (APR), terms and conditions of recovery, look-up period as well as grievance related guidelines. A look-up period is offered to customers during which they can exit by paying principal and proportionate APR with no penalty. Any charge or fee not mentioned in the KFS cannot be charged to the borrower. In a statement, Bajaj Finance said, “We wish to submit that Key Fact Statement (‘KFS’) are being issued for the loans booked under the above mentioned two lending products. However, based on the supervisory concerns raised by the RBI, we will undertake a detailed review of the KFS and implement requisite corrective actions to the satisfaction of the RBI at the earliest.” Following the RBI’s directive, the company has temporarily suspended sanction and disbursal of new loans under the two lending products. “We re-affirm our commitment to rectify observations of the RBI in Key Fact Statement and comply with RBI Directions at the earliest, and will continue with our endeavor to provide seamless financial services to our customers,” Bajaj Finance added. On October 10 this year, the RBI asked Bank of Baroda (BoB) to suspend further onboarding of customers onto the 'bob World', the lender's mobile banking application. It said the action on the bank is based on certain material supervisory concerns observed in the manner of onboarding of their customers onto this mobile application.
