Examiners accept that Bajaj Back offers will be beneath weight within the close term, but the issue can be settled before long because it appears more of an operational breach instead of a major infringement.
2 read read 11/16/2023, 09:30 PM IST
Bajaj Finance’s shares went down by almost 4% on Thursday because the Reserve Bank of India (RBI) said they can’t give out loans for two of their products. Bajaj Finance’s stock price fell by 3. 97% to ₹6,93715 on the BSE.
The RBI told the company to stop giving out loans from its ‘eCOM’ and ‘Insta EMI Card’ right away. This rule was made because people were worried that borrowers weren’t getting Key Fact Statements (KFS) and that some KFS for other digital loans were not good enough. Bajaj Finance said in a legal document that they will have to follow certain rules until they fix the problems the RBI has found.
Bajaj Finance said they were giving out KFS for loans, but they need to check them and fix any problems because the RBI was worried.
Experts think that Bajaj Finance’s shares won’t be affected much in the near future. They see it as more of a small problem with how the company operates, rather than a big problem. The brokerage firm CLSA expects Bajaj Finance to have 6% less profit during the ban period. However, Bajaj Finance does not think that the RBI’s actions will have a big impact on their finances.
eCommerce lending will no longer be available on websites like Amazon, Flipkart, Yatra, and MakeMyTrip. Bajaj Finance helps its EMI card customers buy things by giving them money. The company will quickly fix any problems mentioned by the RBI and says it won’t affect its profits much.
The ban comes at a time when things are not very busy, and Bajaj Finance usually gives a lot of loans on e-commerce websites after the holidays. Experts think they might not give as many loans over the next 45-90 days because of the ban.
Taking into account the average amount of money people spend on tickets, which is ₹30,000, ₹40,000, and ₹50,000, the brokerage firm expects that there will be a change in the amount of money being paid out, from ₹13. 6 billion to ₹45 billion. This is based on the assumption that there will be a delay of 45-90 days before the money is paid out. Even though there are problems, Bajaj Finance is positive about fixing the issues and lessening the effect on its money situation.
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