The Reserve Bank of India has granted a certificate of registration to Bajaj Auto Consumer Finance Ltd.
The certification of registration allows the company to "commence/carry on the business of a nonbanking financial institution without accepting public deposits, subject to the conditions given in the said certificate", the auto major told exchanges on Friday.
The certificate was received on Thursday.
The creation of Bajaj Auto Consumer Finance, a wholly owned subsidiary, was announced in 2021 when the board of parent Bajaj Auto Ltd. agreed to it.
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"The new company is expected to strengthen the financing options for its customers, as financing is key to an automobile business," the auto major had said in October 2021, adding that the new company would lend towards two-, three-, and light four-wheeler vehicles manufactured and/or marketed by Bajaj Auto or its subsidiaries and associates.
This new entity will be in addition to Bajaj Finance Ltd., which is a non-bank lender already active under the Bajaj brand.
Currently, Bajaj Finance does two- and three-wheeler lending and started lending towards non-Bajaj vehicles last year. As of June 30, Bajaj Finance's consolidated assets under management rose 32% year-on-year to Rs 2.7 lakh crore. The two- and three-wheeler financing business rose 48% from a year ago to Rs 14,736 crore.
As part of the certificate it issued, the RBI also listed a few disclaimers. According to the regulator, it does not take any responsibility for or guarantee the financial soundness of the company. It also does not accept any responsibility or provide any guarantee to depositors who may have placed their deposits with the company.
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