Bajaj Finance, meanwhile, can continue to issue Insta EMI Cards and the restriction is only on digital loan sanction and disbursal through these Insta EMI card, analysts noted. 
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Bajaj Finance, meanwhile, can continue to issue Insta EMI Cards and the restriction is only on digital loan sanction and disbursal through these Insta EMI card, analysts noted. Shares of Bajaj Finance Ltd tanked 4 per cent in Thursday's trade as the Reserve Bank of India (RBI) asked it stop disbursing loans under two of its lending products namely, ‘eCOM’ and ‘Insta EMI Card’, with immediate effect.
The Bajaj Finance management is expecting the embargo to be lifted within the next 6-8 weeks. "Underlying this was the belief that the deficiencies identified by the RBI can be rectified within the next 2-3 weeks, and the RBI could then review the rectifications made by BAF and lift the restrictions within the next 4-5 weeks. We acknowledge that the RBI might want to observe Bajaj Finance compliance with digital lending guidelines for longer before lifting the embargo," Motilal Oswal Securities said.
Bajaj Finance, meanwhile, can continue to issue Insta EMI Cards and the restriction is only on digital loan sanction and disbursal through these Insta EMI card, analysts noted. Following the development, the stock fell 3.93 per cent to hit a low of Rs 6,940 on BSE.
"We believe that Insta EMI Card acquisitions/issuances could decelerate over the next 45-90 days because of the restrictions on digital loan sanctions and disbursals on the Insta EMI card. Until recently, Bajaj Finance has been doing quarterly run-rate of 650-6,80,000 Insta EMI card acquisitions. Insta EMI Card CIF of 4.2 million is 10 per cent of the total EMI cards outstanding and contributes 5.5 per cent of Bajaj Finance's total customer franchise," Motilal Oswal said.
The domestic brokerage has maintained its ‘Buy’ recommendation on the stock and said any significant correction in the stock price purely because of this event should be used as an opportunity to accumulate.
The RBI ban came in due to non-issuance of key fact statements to the borrowers under the two lending products, in addition to the deficiencies in the key fact statements issued in respect of other digital loans sanctioned by the NBFC.
The announcement came post market hours of Wednesday. The scrip fell 1.84 per cent to Rs 7,223.95 in an otherwise strong trading session on Dalal Street.
Also read: Sensex falls over 150 points, Nifty slips below 19,650; Bajaj Finance, Motilal Oswal down up to 3%
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