Bajaj Finance shares fall 4% in early trade following RBI's direction

New Delhi: Shares of Bajaj Finance declined up to 4 per cent in early trade on Thursday following the Reserve Bank direction to the firm to stop sanction and disbursal of loans under its two lending products due to non-adherence to lending guidelines.

The stock fell 3.97 per cent to a day's low of Rs 6,937.15 on the BSE. At the NSE, it declined 4 per cent to Rs 6,931.25.

But, later the stock recovered its early losses in line with gains in the broader market and was trading higher with marginal gains.

The Reserve Bank on Wednesday directed Bajaj Finance to stop sanction and disbursal of loans under its two lending products, eCOM and Insta EMI Card, with immediate effect due to the non-adherence of the company to the extant provisions of digital lending guidelines.

"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 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," the RBI said in a statement.

These supervisory restrictions will be reviewed after the rectification of said deficiencies to the satisfaction of the RBI, the central bank added.