Bajaj Finance, one of the country’s largest non-banking finance companies, has been severely reprimanded by the Reserve Bank of India (RBI). Also a strict order has been issued against him. In this order, Bajaj Finance has been asked to immediately stop distributing loans through ‘eCOM’ and ‘Insta EMI Card’. What are these services and how will this order of RBI affect you?
The Central Bank has given this order to Bajaj Finance using its powers under Section 45(1)(b) of the Reserve Bank of India Act. Bajaj Finance has been asked to implement this order of RBI from November 15, 2023 itself.
After all, what mistake did Bajaj make?
RBI has imposed this ban on Bajaj Finance for not following the rules of digital loan. RBI had decided the rules for digital lending in September 2022. In this, instructions were given to finance companies to issue ‘Key Fact Statement’. The finance company cannot recover any charges, late fees etc. from the customers, which will not be mentioned in this statement. It is important to share these rules with the customers before giving them loan.
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What effect will it have on you?
RBI has asked to stop Bajaj Finance’s ‘E-Com’ and ‘Insta EMI Card’ loan services immediately. Both these services are used to buy goods on easy installments on e-commerce sites and retail chains. In this, customers get the facility to purchase the product on ‘No Cost EMI’. At the same time, people get a maximum limit of up to Rs 2 lakh and a loan repayment tenure of 60 months.
Now Bajaj Finance will not be able to start this service till the review by RBI. Bajaj Insta EMI Card or EMI Card Network has 4.2 crore customers across the country.
