Bajaj Finance: This may not be the first time you are hearing about clashes between Bajaj Finance and the RBI. Recently it has been making headlines for not one but many of its subjects.
Three major things hit this year, making people think twice about using Bajaj Finance services. So, what are those? Keep reading to learn more!
First – Spam calls from Bajaj Finance
Most people were extremely frustrated and annoyed by unwanted calls and messages from Bajaj Finance. They went to Twitter, calling them a “spam call factory”.
In response, Sanjiv Bajaj promised a solution within three months where their website and app would have the ability to never bother anyone again.
But there was a catch: if you use it, he says, “Make sure you never come back to us for our products and solutions.”
He also admitted that the company gives out 3 million loans every month and deals with 1,500 complaints per quarter.
Second – Penalty on Bajaj Finance for not adhering to rules
On October 13 this year, the RBI imposed a monetary penalty of Rs. 8.50 lakh for non-compliance of the RBI directions. Specifically, failure to report and delay in reporting certain frauds to the RBI.
Before that, back in January 2021, RBI fined them Rs. 2.5 crore for violation of directions issued by RBI on risk management and code of conduct in outsourcing of financial services.
Third – RBI ordered Bajaj Finance to discontinue two of their loan products.
On November 15, RBI directed them to immediately stop sanctioning and disbursing loans on two of their loan products, ‘eCOM’ and ‘Insta EMI Card’.
So, what’s the deal with these products? While the ‘eCOM’ product is given to borrowers for online shopping and is a consumer finance facility, the ‘Insta EMI Card’ is a quick finance solution that bypasses the usual application hassle and has a pre-approved loan limit of up to Rs. 2 lakh, usable in Rs. 1.5 thousand online and offline stores.
But why did the RBI direct them to stop it? Well, it turns out that Bajaj Finance has not adhered to RBI’s digital lending guidelines.
In particular, non-issuance of Key Fact Statements (KFS) to the borrowers under these two loan products and the deficiencies in the issued in relation to other digital loans sanctioned by the company, said the RBI.
RBI also said that once these issues are addressed and the issues are resolved to RBI’s satisfaction, they will reconsider the supervisory restrictions.
RBI introduced its digital lending guidelines last year, requiring lenders to provide borrowers with a KFS containing information including the loan amount, interest charges, fees, annual percentage rate, disbursed amount, insurance charges, number of payments and other 8 parameters.
In the meantime, Bajaj Finance has temporarily suspended the sanction and disbursement of new loans online or digitally on “Insta EMI Card” and under “eCOM”.
Written by Shivani Singh
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