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RBI’s Hammers JM Financial: Uncover The 2 amazing Details here💥📉

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By Media Reporter

In recent developments, JM Financial Products is facing regulatory scrutiny as the Reserve Bank of India (RBI) imposes immediate business restrictions on its financing against shares and debentures. This decision follows a thorough review of the apex bank’s directives, with the company asserting that its loan sanctioning process aligns with regulations.

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JM Financial : Maintaining Integrity Amidst Challenges

In response to the RBI’s directives, JM emphasizes its commitment to conducting business affairs with integrity, asserting the absence of governance issues. The company stands firm in its belief that there are no substantial deficiencies in its loan sanctioning process and expresses the intention to continue servicing existing customers as advised by the RBI.

A spokesperson from JM clarifies that the company, with a two-decade history in funding Initial Public Offerings (IPOs), operates within the legal framework. The short-term and self-liquidating nature of IPO financing products, including the common industry practice of obtaining a Power of Attorney (POA), is highlighted. Despite the challenges, The company aims to cooperate fully with the RBI’s special audit initiative to explain its position comprehensively.

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Reserve Bank of India (RBI’s) Concerns and Actions

The RBI’s decision to restrict JM Fin Products from sanctioning and disbursing loans against IPOs and debentures stems from identified deficiencies. The apex bank conducted a limited review based on information shared by the Securities and Exchange Board of India (SEBI), revealing instances where JM facilitated customers in bidding for IPOs and NCD offerings using loaned funds.

The credit underwriting process was found to be perfunctory, with financing done against meager margins. The RBI raised concerns about the use of POA and Master Agreements obtained from customers, enabling JM to act as both lender and borrower. Violations of regulatory guidelines and governance issues were identified, prompting the RBI to take corrective measures.

Moving Forward: A Path to Redemption

The RBI emphasizes that business restrictions will be reviewed upon the completion of a special audit instituted by the RBI and after the rectification of identified deficiencies to its satisfaction. The regulatory body also clarifies that these restrictions are without prejudice to any other regulatory or supervisory actions that may be initiated against JM Fin.

As company navigates these challenges, the financial community will be watching closely to see how the company addresses the concerns raised by the RBI and reinstates its standing in the market. The outcome of the special audit will likely play a crucial role in determining the future trajectory for the company.

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