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RBI KFS: The Reserve Bank of India orders all regulated entities to provide a key fact statement to borrowers for all retail and MSME loans to enhance transparency and financial literacy.
The new announcement comes after RBI, in September 2022, issued guidelines on protecting borrowers. As per the guidelines issued last year, lenders were required to inform customers about the cost of taking the loan. Lenders are now required to issue a Key-Fact Statement to the borrower before any loan is given.
Bajaj Finance informed stock exchanges that the supervisory restrictions will remain in place till the deficiencies observed are made good by the company to the satisfaction of RBI, in terms of issuance of Key Fact statements to the borrowers.
The Reserve Bank of India has issued orders to Bajaj Finance, asking the company to stop the disbursal and sanction of loans under two of its lending products with immediate effect. What are the orders and what could be the reason?