Bajaj Finance received an RBI ‘letter of displeasure’ for its co-branded credit card business because of customer data and financial security risks. The NBFC received criticism from the regulator because it did not establish proper internal controls.
Bajaj Finance received the RBI’s letter after the bank replied to the January 31 communication on February 22. The central bank declared that the firm has not implemented sufficient measures to stop data leaks and fraudulent activities. The letter required enhanced compliance standards and better cybersecurity protocols and independent auditor selection without conflicts of interest.
Bajaj Finance stock price declined by 2% at the start of trading on April 3 after the news broke. Bajaj Finance received permission from the RBI to start loan disbursals for specific digital products in May 2024 after failing to meet lending regulations previously.
Bajaj Finance and RBL Bank terminated their co-branded credit card partnership in November of the previous year. RBI Governor Sanjay Malhotra emphasized financial inclusion and customer protection for NBFCs while stressing the necessity of enhanced sectoral oversight.
