The Reserve Bank on Tuesday barred JM Financial Products Ltd from providing any form of financing against shares and debentures, including sanction and disbursal of loans against initial public offering, with immediate effect.

A security official walks past an emblem of the Reserve Bank of India at the RBI headquarters, in Mumbai (PTI FILE)

The company can, however, continue to service its existing loan accounts through the usual collection and recovery process, the Reserve Bank said in a statement.

Hindustan Times – your fastest source for breaking news! Read now.

JM Financial Products has been directed to cease and desist, with immediate effect, from doing any form of financing against shares and debentures, including sanction and disbursal of loans against Initial Public Offering (IPO) of shares as well as against subscription to debentures.

RBI said the action is necessitated due to certain serious deficiencies observed with respect to loans sanctioned by the company for IPO financing as well as NCD subscriptions.

The RBI carried out a limited review of the books of the company on the basis of the information shared by the Securities and Exchange Board of India (SEBI).

The business restrictions imposed will be reviewed upon the completion of a special audit to be instituted by the RBI and after rectification of the deficiencies to the satisfaction of RBI.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it’s all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs



Source link