The Reserve Bank of India (RBI) has prohibited JM Financial Products Ltd (JMFPL) from providing financing against shares and debentures.

 This includes issuing loans related to initial public offerings (IPOs) of shares and subscriptions to debentures. The RBI took this action due to significant deficiencies found in the loans sanctioned by JMFPL, which is an important non-deposit taking non-banking financial company (NBFC). 

The RBI conducted a limited review of the company’s books based on information shared by the Securities and Exchange Board of India (SEBI). It was discovered that there were issues with credit underwriting and financing against minimal margins. Additionally, JMFPL assisted customers with IPO and NCD bids using loaned funds, without their involvement. 

The company acted as both lender and borrower and managed accounts using power of attorney obtained from customers. The RBI mentioned governance concerns and is investigating regulatory violations by the company and any potential involvement by banks.

 The restrictions on JMFPL will be evaluated after a special audit and rectification of deficiencies. Despite this, the company can continue serving existing loan accounts through regular collection and recovery procedures.

For more information visit at https://happenrecently.com/zepto/?amp=1