JM Financial on RBI Curbs: ‘Our Loan Sanctioning is Flawless’

JM Financial Products Ltd, a non-banking financial company (NBFC) and a subsidiary of JM Financial Group, has issued a statement in response to the Reserve Bank of India’s (RBI) restrictions on its financing activities. The company said that it has not violated any regulations and that its loan sanctioning process is flawless.

The RBI had imposed curbs on JM Financial Products on March 6, 2024, after finding serious deficiencies in its funding for initial public offerings (IPOs) and non-convertible debentures (NCDs). The central bank had barred the NBFC from providing any kind of financing against shares and debentures, including sanction and disbursal of loans against IPOs and NCDs. The RBI had also said that it is separately examining any possible regulatory violations and deficiencies on the part of the banks concerned.

In its statement, JM Financial Products said that it has carefully and detailedly reviewed the RBI order and strongly believes that there have been no material deficiencies in its loan sanctioning process. The company also said that it has not indulged in any manipulations or governance issues as alleged by the RBI.

The company claimed that it has followed all the applicable regulations and guidelines while providing loans for IPOs and NCDs. It said that it has obtained proper power of attorney (POA) and master agreement from its customers and that they were fully aware of the transactions. The company also said that it has done proper credit underwriting and risk assessment before sanctioning loans.

The company further said that it will cooperate with the RBI and provide all the necessary information and clarifications to resolve the matter at the earliest. It also assured its customers, shareholders and other stakeholders that it will continue to service its existing loan accounts through the usual collection and recovery process.

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