RBI bar on two Bajaj Finance products may affect retailers
NEW DELHI : Retailers across the board may suffer after the Reserve Bank of India barred the largest consumer goods financier Bajaj Finance from disbursing loans under two products. On Wednesday, RBI barred Bajaj Finance from lending under its two products—eCom and Insta EMI Card—citing non-compliance with digital lending guidelines. Several retailers that Mint spoke with said this move will significantly impact retailers—both online and offline.
Online marketplaces such as Amazon and MakeMyTrip have already stopped offering Bajaj Finance’s EMI option. “Following instructions from Bajaj Finance Limited, Bajaj Finserv EMI card (BFL) will not be available on Amazon from 16th November 2023. BFL should be back soon, please keep checking Amazon for the latest status," read a note on the e-commerce website.
Lending platforms account for a significant share of sales for large retailers, especially for big-ticket purchases such as mobile phones and furniture. Over the last six to eight months, the popularity of Bajaj Finserv Insta EMI Card had gone up as it offered customers a flexible repayment tenure and no-cost EMI options, said retailers. “In times when high inflation is eating into household budgets, more consumers have come to use and avail of the benefits of this lending product," said Anirban Chakraborti, who heads omni-channel business at mobile phone seller Sangeetha Mobiles.
Financing products account for nearly 50% of sales for mobile phone retailers. Bajaj Finance is the largest such non-banking finance company. Retailers typically use the financing product to attract new customers, Chakraborthy said.
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