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The Reserve Bank of India has imposed a penalty of Rs 1 crore on Bajaj Finance Ltd, a non-banking financial company (NBFC) for deficiencies in regulatory compliance.
According to RBI, the penalty has been imposed, by an order on January 3, for violation of 'fair Practices Code of Master Direction DNBR'.
RBI said in a statement on Monday, "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 NBFC with its customers."
Bajaj Finance is into businesses such as consumer finance, SME finance and commercial lending.
Bajaj Finance Limited, a subsidiary of Bajaj Finserv, is an Indian Non-Banking Financial Company. The company deals in Consumer Finance, SME and Commercial Lending, and Wealth Management.
Headquartered in Pune, Maharashtra, the company has 294 consumer branches and 497 rural locations with over 33,000+ distribution points. The company reported a pre-tax profit of Rs.626 crores and a post-tax profit of Rs.408 crores at a ROA of 0.8% and ROE of 5.1% in Q2 FY17.
Originally incorporated as Bajaj Auto Finance Limited on March 25, 1987, the non-bank singularly focused on providing two and three wheeler finance. After 11 years in the auto finance market, Bajaj Auto Finance Ltd launched its initial public issue of equity share and was listed on the BSE and NSE.
At the turn of the 20th century, the company ventured into the durables finance sector. In the subsequent years, Bajaj Auto Finance diversified into business and property loans as well.
In the year 2006, the company’s assets under management hit the Rs.1,000 crore mark and are currently at Rs.52,332 crore. 2010 saw the company’s registered name change from Bajaj Auto Finance Limited to Bajaj Finance Limited.