The Reserve Bank directed Bajaj Finance to halt the sanction and disbursal of loans under its eCOM and Insta EMI Card products immediately.
This move comes as a result of the company's non-compliance with the Digital Lending Guidelines, specifically the non-issuance of Key Fact Statements and deficiencies in those issued for other digital loans. The supervisory restrictions will be lifted after the company rectifies these issues to the satisfaction of the RBI.
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The central bank had released norms on August 10, 2022, to regulate digital lending and curb fraud and unlawful activities. These regulations were proposed by a working group set up by the RBI in January 2021 to study digital lending issues.
The norms address the proliferation of instant loan providers, especially after the COVID-19 pandemic, which have sometimes exploited consumers and employed aggressive recovery practices.