Shares of JM Financial slipped over 15% in trade on Wednesday after the Reserve Bank of India barred the company from financing against shares and debentures. This comes a day after RBI issued strict directives to IIFL Finance on Monday.
JM Financial share price hit a day’s low of Rs 77.55 against its previous close of Rs 95.85 on the NSE. As of 9:50 AM, JM Financial shares were trading 15.2% lower at Rs 80.90 on the NSE.
RBI has prohibited the firm from extending loans against shares and debentures, including loans against Initial Public Offering (IPO) shares, effective immediately.
The RBI’s decision, announced on March 5, comes in response to serious deficiencies identified in JMFPL’s loan processes. Moreover, the central bank has raised concerns regarding governance issues within the company, alongside violations of regulatory guidelines.
This regulatory action underscores the RBI’s commitment to upholding standards of governance and compliance within the financial services sector. It highlights the importance of stringent adherence to regulatory norms to ensure the stability and integrity of the financial system.
