India's Bajaj Finance asks central bank for lending products ban removal

By Nishit Navin and Jaspreet Kalra

BENGALURU (Reuters) -Indian non-banking lender Bajaj Finance said on Thursday it has asked the country's central bank to lift the restrictions on two of its lending products, and added that it has made required regulatory changes.

In November, the Reserve Bank of India banned the firm from issuing loans under "eCOM" and "Insta EMI Cards" products, saying the lender did not issue key information to borrowers.

Earlier in the day, the lender had reported a larger-than-expected 21% rise in fourth-quarter profit on Thursday, boosted by steady loan demand.

Consolidated profit after tax rose to 38.25 billion rupees ($459.2 million) in the three months to March 31. Analysts, on average, had estimated a profit of 37.17 billion rupees, according to LSEG data.

Consolidated numbers include the businesses of the lender's subsidiaries, Bajaj Housing Finance and Bajaj Financial Securities.

Demand for credit has remained strong over the last few quarters, especially in the retail segment that includes personal loans and credit card spends, driven by consumer spending.

Analysts believe the higher-ticket loans more than offset the ban on two small-ticket products, and aided the lender's asset under management (AUM) growth of 34% in the quarter.

The Insta EMI card offers consumers pre-approved credit for small ticket purchases, while eCOM is a consumer financing facility for online shopping via e-commerce sites. Bajaj Finance expects a 26%-28% rise in AUM for fiscal year 2025.

Interest income rose about 34% to 132.30 billion rupees.

However, the lender's loan losses and provisions - the money set aside to cover potential defaults - grew nearly 52.5% year-on-year in the quarter to 13.10 billion rupees due to continued stress in the rural personal loan segment.

Shares of the company ended 0.5% lower ahead of the results.

($1 = 83.3064 Indian rupees)

(Reporting by Nishit Navin in Bengaluru; Editing by Janane Venkatraman and Vijay Kishore)