THE RESERVE BANK of India's (RBI) decision to ban Bajaj Finance's two products -eCOM and Insta EMI Card - with immediate effect on Wednesday could dent the nonbanking finance company's (NBFC's) bottom line by 6% till it is revoked, analysts say.
Foreign brokerage CLSA in a note on Thursday said Bajaj Finance issues nearly 700,000 digital EMI cards on a quarterly basis for which the processing fee is 600. Due to the ban, the NBFC would now see absence of this fee, which would lead to a revenue loss of ₹42 crore.
In addition, according to CLSA estimate, about 30% of Bajaj Finance digital EMI cardholders apply for a loan within the first three months and therefore, the foregone revenue from those loans is another ₹23 crore. CLSA said Bajaj Finance's 'eCOM' product generates roughly around 1 million loans each quarter, or 20%-25% of overall consumer durable loans disbursed by the NBFC. Since these loans account for 10% of overall loans and 15% of its net profit, the profit would be down by 4%-5% if 20%-25% of consumer durable loans get impacted by the ban.
This story is from the November 17, 2023 edition of Financial Express Mumbai.
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This story is from the November 17, 2023 edition of Financial Express Mumbai.
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