Bajaj Finance shares gain attention as RBI lifts ban on Insta EMI Card and eCOM

Bajaj Finance Ltd (BAF) is set to make a comeback as the Reserve Bank of India (RBI) lifts restrictions on its eCOM and online digital ‘Insta EMI Card’ products. The news comes after the NBFC took necessary remedial actions in response to regulatory restrictions, leading to the RBI’s decision to remove the ban with immediate effect.

Analysts had been anticipating this move, as Bajaj Finance had been working diligently to address the regulatory concerns and formally requested the RBI for a review of the restrictions. The company confirmed the positive development in a statement, expressing its commitment to ensuring compliance with regulatory guidelines.

The regulatory ban on the two products had impacted Bajaj Finance’s performance in the past, with a 4 per cent impact on its Profit Before Tax (PBT) in the last quarter. Despite this setback, the NBFC has set ambitious targets for the future, aiming for a 26-28 per cent growth in Assets Under Management (AUM) in FY25.

However, analysts at Nomura India caution that Bajaj Finance may face challenges in achieving its targets, with expectations of lower Return on Equity (RoE) and Profit After Tax (PAT) growth compared to the company’s guidance. Factors such as pressure on Net Interest Margins (NIMs) and elevated credit costs could pose challenges for Bajaj Finance in the coming months.

Investors and market watchers will be closely monitoring Bajaj Finance’s performance in the wake of these developments, as the company navigates through the changing regulatory landscape and strives to maintain its growth trajectory.