RBI asks to stop Lending via Ecom and Bajaj Finance Insta EMI card

The Reserve Bank of India (RBI) on Wednesday, 15th November, asked Bajaj Finance to stop sanctioning and disbursing loans under 'eCOM' and 'Insta EMI Card' with immediate effect. Bajaj Finance is the country's largest consumer financier that used to sanction loans under two lending products- eCOM and Insta EMI Card.

• Bajaj Finance eCOM- eCOM lending product is a consumer financing facility given to borrowers for online shopping by Bajaj Finance.
• Bajaj Finance Insta EMI Card- It is a financing solution that customers can sign up for and shop for a diverse range of products and avail EMI payments on them.

According to Bajaj Finance, the Insta EMI Card comes with a pre-approved loan of up to Rs 2 lakh. Users can sign up for the card and use it to avail loans through the company. It can be used for offline and online shopping.

RBI asked to stop lending via Ecom and Bajaj Finance Insta EMI Card because of non-adherence with existing digital loan guidelines. It was majorly about the non-issuance of Key Fact Statements (KFS) to the borrowers under these two lending products.

RBI has given the statement and explained the reason as "this action is necessitated due to non-adherence of the company to the extant provisions of digital lending guidelines of the Reserve Bank of India, particularly the non-issuance of Key Fact Statements to the borrowers and the deficiencies in the Key Fact Statements issued in respect of other digital loans sanctioned by the company."

However, RBI has also issued the statement that these are supervisory restrictions, and once Bajaj Finance fixes the concerned issues, the Bajaj Finance Insta EMI Card RBI probe will be reviewed. 

How did Bajaj Finance react to the new restriction?

As RBI asked to stop Bajaj Finance Insta EMI Card, the company said a Key Fact Statement is being issued for the loans booked under the two above-mentioned lending products. At the same time, they ensured the undertaking of a detailed review of the KFS and implemented requisite corrective actions to the satisfaction of the RBI at the earliest to fulfil the supervisory concerns raised by the Reserve Bank of India. 

What are the benefits of the Bajaj Finance Insta EMI Card?

Bajaj Finance Insta EMI Card benefits are several and are designed for customers' convenience. It is an interest-free card that allows users to shop from over 1 million products hassle-free. Here are some major benefits of the Bajaj Finance Insta EMI Card-

• It is accepted at more than 1.5 lakh stores in over 4000 small and large cities in the country.
• It makes online shopping easy and lucrative where the card can be used at bajajmall.in, Amazon, MakeMyTrip, Vijay Sales, Tata Chroma, Reliance Digital, and many more. 
• In festive seasons, the card runs on zero down payment schemes, allowing users to pay nothing at the time of purchase. 
• Users can take benefits of special EMI schemes that reduce the amount of EMI every month and allow them to take longer repayment tenure.
• It allows every purchase under EMI- from groceries and electronics to fitness equipment and home appliances. 
• There are flexible repayment tenures under the Bajaj Finance Insta EMI Card.
• The process of application is online and involves no fuss. 

What is the Bajaj Finance Insta EMI Card interest rate?

Since the Bajaj Finserv Insta EMI Card attracts a 0% interest rate, it has a huge customer base. At the same time, it offers a unique opportunity to buy products and services on easy EMIs without the burden of additional costs; the new supervisory restriction will impact the market.

What is Bajaj Finance Insta EMI Card eligibility?

Indian citizens aged between 21 and 65 years with a steady income source and a good credit history are eligible for the Bajaj Finance Insta EMI Card.

How will the RBI restriction impact Bajaj Finance eCOM and Insta Card EMI customers?

As the new restriction was imposed, Bajaj Finance temporarily suspended the sanction and disbursal of new loans under 'eCOM' and 'Insta EMI Card' products. However, the good news is it will not impact the existing loans taken via these products by the customers. 

FAQs (Frequently Asked Questions)

Why did RBI ask to stop lending via Ecom and Bajaj Finance Insta EMI card?

Bajaj Finance's "non-adherence" to its existing digital lending guidelines, particularly about the non-issuance of Key Fact Statements to the borrowers under eCOM and EMI Card, is the major reason for it. 

What are the major benefits of the Bajaj Finance Insta EMI Card?

The major benefits include a pre-approved card limit of up to 2 lakhs, No Cost EMIs, flexible repayment tenure, nil foreclosure charges, easy card access on the Bajaj Finserv app, valid in more than 4,000 cities and use at more than 1.5 lakh partner stores.

Will RBI lift its restriction against Ecom and Bajaj Finance Insta EMI card in the future?

As per RBI, the restrictions are supervisory, and if Bajaj Finance fixes the concerned issues, the restriction will be reviewed.

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Conclusion 

Reserve Bank of India has restricted Bajaj Finance from lending via Ecom and Insta EMI Card due to non-adherence to guidelines; however, the company has stated it has issued the Key Fact Statement ('KFS') of the loaners. Once Bajaj Finance is able to satisfy RBI with the deficiencies in KFS, it is expected that the Reserve Bank of India will suspend the restrictions.