Bajaj Finance: This might not be the first time you hear about clashes between Bajaj Finance and the RBI. Lately, it is making headlines for not one but many of its issues.
Three major issues have 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 took to Twitter, calling them “spam calls factory”.
In response, Sanjiv Bajaj promised a fix within three months where their website and app would have the option 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 issues 3 million loans monthly and deals with 1,500 complaints per quarter.
Second – Penalty on Bajaj Finance for not adhering to rules
On October 13th of this year, the RBI imposed a monetary penalty of Rs. 8.50 lakh for non-compliance with 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 violating directions issued by RBI on managing risks and code of conduct in outsourcing financial services.
Third – RBI ordered Bajaj Finance to stop two of their lending products.
On November 15, RBI directed them to immediately stop sanctioning and disbursing loans on two of their lending 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 financing facility, the ‘Insta EMI Card’ is a quick financing solution that skips the usual application hassle and has a pre-approved loan limit of up to Rs. 2 lakh, usable in Rs. 1.5 lakh online and offline stores.
But why did the RBI direct them to stop it? Well, it turns out that Bajaj Finance wasn’t sticking to the digital lending guidelines of RBI.
Particularly non-issuance of Key Fact Statements (KFS) to the borrowers under these two lending products and the deficiencies in the issued in respect of other digital loans sanctioned by the company, said the RBI.
RBI has also said that, once these issues are addressed and the problems are fixed to the satisfaction of RBI, they’ll reconsider the supervisory restrictions.
RBI introduced its digital lending guidelines last year, demanding lenders provide borrowers with a KFS containing information including the loan amount, interest charges, fees, annual percentage rate, disbursed amount, insurance charges, number of installments and other 8 parameters.
In the meantime, Bajaj Finance is temporarily suspending the sanction and disbursal of new loans online or digitally on ‘Insta EMI Card’ and under ‘eCOM.
Written By Shivani Singh
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