Bajaj Finance's shares surged by more than 7% during early trading as the Reserve Bank of India (RBI) lifted restrictions on two of the non-banking financial company's (NBFC) products, 'eCOM' and the online digital 'Insta EMI Card' effective immediately. These restrictions, which were imposed by the central bank last November, pertained to the approval and disbursement of new loans under these two products.

Celebrating the announcement, Bajaj Finance shares commenced trading at Rs 7,350, marking a 6.8% increase from the previous day's closing price of Rs 6,881 on the BSE. Sustaining the initial surge, the prominent NBFC climbed by as much as 7.5% to reach Rs 7,400, thereby boosting its market capitalization to Rs 4.51 lakh crore. Notably, the stock achieved its highest point in the last 52 weeks at Rs 8,190 on October 6, 2023, while hitting a low of Rs 6,185.45 on May 4, 2023.

In an exchange filing last evening, the country’s most valued NBFC firm in terms of m-cap said the central bank removed the restrictions based on the remedial actions taken by the company. “The RBI, vide its letter dated 2 May 2024, based on the remedial actions taken by the Company, has conveyed its decision of lifting the said restrictions on eCOM and online digital ‘Insta EMI Card’, with immediate effect”, Bajaj Finance said in a BSE filing.

On November 15, 2023, the RBI enforced a prohibition on eCOM and Insta EMI Card because of the failure to provide essential fact statements to borrowers for these two lending products, as well as deficiencies observed in the fact statements issued for other digital loans sanctioned by the company.

The RBI, in its notification, had said, "This action was necessitated due to non-adherence of the company to the extant provisions of digital lending guidelines of Reserve Bank of India, particularly non-issuance of key fact statements to the borrowers under these two lending products and the deficiencies in the key fact statements issued in respect of other digital loans sanctioned by the company”. 

In response to the RBI action, the company had clarified that the key fact statement (KFS) was being issued for the loans booked under the above-mentioned two lending products. “However, based on the supervisory concerns raised by the RBI, we will undertake a detailed review of the KFS and implement requisite corrective actions to the satisfaction of the RBI at the earliest”, it had then said in the exchange filing.

In an independent development, Bajaj Finance secured Rs 1,371.25 crore by issuing 1,36,350 secured redeemable non-convertible debentures (NCDs) through private placement, each valued at Rs 1 lakh. This decision was ratified during the meeting of the company's debenture allotment committee. The intention is to list these debentures on the Wholesale Market Segment of BSE Limited.