Key Points
The Reserve Bank of India on Wednesday barred JM Financial Products from doing any form of financing against shares and debentures after it found 'serious deficiencies' that are detrimental to the interest of the customers, during a review of its books...
This includes sanctioning and disbursing loans against IPO of shares and subscription to debentures...
RBI said it found certain 'serious deficiencies' with respect to the loans JM Financial sanctioned for IPO financing and NCD subscriptions..
RBI said that during the limited review, JM Financial Products repeatedly helped a group of its customers to bid for various IPO and NCD offerings by using loaned funds..
The application for subscription, the demat accounts and the bank accounts, all were operated by the company using a Power of Attorney (POA) and a Master Agreement obtained from these customers without their involvement, whatsoever, in the subsequent operations, RBI has found...
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