The Reserve Bank of India has loosened limits on JM Financial Limited’s subsidiary JM Financial Products Ltd’s ability to finance against shares and debentures, the company announced on October 18.
The RBI’s earlier restrictions were immediately lifted by means of a letter dated October 18, 2024. With immediate effect, the RBI had prohibited JM Financial Products Ltd. from offering any kind of financing secured by shares and debentures back in March of this year, including the approval and disbursement of loans against initial public offerings.
RBI order against JM Financial Services
With immediate effect, JM Financial Products Ltd (JMFPL) was prohibited by the RBI on March 5 from providing loans secured by shares and debentures, including the approval and disbursement of loans for share IPOs. “Aside from breaking regulatory guidelines, there are significant concerns regarding the company’s governance, which we believe is detrimental to the interests of the customers,” the RBI stated in March.
Based on information provided by the Securities and Exchange Board of India, the regulator said it had performed a cursory examination of JM Financial’s records and discovered the company had frequently assisted a group of clients in using borrowed funds to bid on numerous initial public offers (IPOs) and non-conventional debt offerings.
About the Company – JM Financial Ltd
JM Financial Limited was established on January 30, 1986, in accordance with the Companies Act 1956, as a Private Limited Company operating under the name “J.M. Share and Stock Brokers Private Limited.” On June 15, 1988, the Company’s promoter, J. M. Financial & Investment Consultancy Services Private Limited, became a considered Public Limited Company, which resulted in the Company’s subsequent status. JM Financial Limited Public Limited Company became the new name of the company on September 15, 2004.
