IRDAI imposes Rs.2 Crore penalty on Bajaj Finance for regulatory violations
IRDAI imposes ₹2 Crore penalty on Bajaj Finance for regulatory violations
NBFC asserts commitment to compliance; operations unaffected
July 17, 2024
The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a ₹2 crore penalty on Bajaj Finance for violating regulatory norms. The Pune-based non-banking financial company (NBFC) disclosed this in an exchange filing on July 16.
An onsite inspection by the insurance regulator was conducted from March 3, 2021, to March 5, 2021, covering the fiscal years 2018 to 2020. Following this, Bajaj Finance received a show-cause notice from IRDAI on March 14, 2024. After reviewing the NBFC’s response, IRDAI issued an order on July 15, 2024, imposing a penalty for breaches of IRDAI regulations.
Bajaj Finance reiterated its commitment to compliance. It emphasized that the penalty will not have a material impact on its operations.
On July 16, Bajaj Finance’s shares saw a slight decline of 0.27%, closing at ₹7,045 on the NSE.
The penalty comprises ₹1 crore for discrepancies in the reconciliation of commission and professional fees and another ₹1 crore for improper maintenance of customer documentation records in violation of IRDAI (Registration of Corporate Agents) Regulations, 2015.
Despite this setback, Bajaj Finance reported a robust financial performance. In April, the NBFC announced a 21% growth in consolidated profit after tax, reaching ₹3,825 crore in Q4 FY 2023-24, up from ₹3,158 crore in the same period the previous year. Additionally, the company’s assets under management (AUM) surged by 34%, from ₹2.47 lakh crore to ₹3.31 lakh crore, with a ₹19,647 crore increase in Q4 FY24 alone.
