Bajaj Finance fell 0.97% to Rs 5071.15 after the Reserve Bank of India (RBI) imposed a penalty of Rs 2.50 crore on the NBFC for use of coercive means of recovery.
RBI on Tuesday (5 January 2021) imposed a monetary penalty of Rs 2.50 crore on Bajaj Finance for using coercive methods of recovery from its borrowers, and violation of general guidelines and one specific direction issued by the regulator.
The penalty has been imposed, taking into account the failure of the company to ensure that its recovery agents did not resort to harassment or intimidation of customers as part of its debt collection efforts and thereby failing to adhere to the aforesaid directions issued by RBI. There were also persistent/repeat complaints about recovery and collection methods adopted by the company, the central bank said in a statement.
The RBI said that a notice was issued to the company advising it to show cause as to why penalty should not be imposed for such non-compliance. After considering the company's reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI concluded that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.
"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers, the country's banking regulator added.
Bajaj Finance is engaged in lending and allied activities. It focuses on consumer lending, small and medium-sized enterprises (SME) lending, commercial lending, rural lending, fixed deposits and value-added services.
The NBFC's consolidated net profit slipped 36% to Rs 965 crore on 3% increase in total income to Rs 6523 crore in Q2 September 2020 over Q2 September 2019.
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