Bajaj Auto Subsidiary Gains RBI Nod for NBFC Launch

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In a significant development, Bajaj Auto’s subsidiary, Bajaj Auto Consumer Finance, has secured regulatory approval from the Reserve Bank of India (RBI) to commence its non-banking financial institution (NBFC) operations. This achievement paves the way for the company to expand its financial services without the need for public deposits.

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Bajaj Auto Subsidiary: Regulatory Nod Received

On August 31, 2023, Bajaj Auto Consumer Finance received the crucial certificate of registration from the RBI, officially authorizing it to function as an NBFC. This milestone signifies a pivotal moment for the subsidiary.

Application for NBFC License

The formal application for an NBFC license was submitted by Bajaj Auto to the Reserve Bank of India on July 9 of the same year. This strategic move was undertaken to diversify the company’s financial operations, marking its entry into the NBFC sector.

Key Certificate Details

Bajaj Auto has shared key insights into the certificate granted by the RBI:

Certificate of Registration issued under section 45-IA of the Reserve Bank of India Act, 1934.
Authorization to engage in the activities of a non-banking financial institution.
Compliance with specific conditions outlined in the certificate.

RBI’s Disclaimer

It is important to note that while granting the license, the RBI included a disclaimer emphasizing its non-involvement in endorsing the financial stability of the company or verifying the accuracy of its statements, representations, or opinions. The RBI also disclaimed any responsibility for the company’s liabilities.

Background: Genesis of Bajaj Auto Consumer Finance

Bajaj Auto had previously announced the establishment of Bajaj Auto Consumer Finance, a wholly-owned subsidiary, in 2021. The subsidiary’s primary objective is to provide financing exclusively for products manufactured by Bajaj Auto.

Robust Financial Performance

In the first quarter of FY24, Bajaj Auto demonstrated its financial strength by reporting a substantial profit after tax (PAT) of Rs 1,665 crore. This remarkable figure represents a remarkable 42 percent increase compared to the corresponding quarter in the previous year. With this financial prowess, the company is well-positioned for its foray into the NBFC sector, promising a bright future for its financial ventures.

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