JM Financial shares views on violation of regulatory guidelines, governance issues post RBI order

Following the Reserve Bank of India (RBI) directives, barring JM Financial Products from financing against shares and debentures with immediate effect, JM Financial said it undertook a detailed review of the order issued by the apex bank and strongly felt that there was no material deficiencies in its loan sanctioning process.

JM Financial said it has not violated applicable regulations. “We also wish to reaffirm that there have been no governance issues whatsoever and we conduct all our business and operational affairs in a bonafide manner. The company shall continue to service its existing customers as advised by the RBI,” it said.

A JM Financial spokesperson said that his company has been in the business of funding IPOs over the last two decades. The IPO financing product is short-term and self-liquidating in nature, he noted adding that: “In the context of IPO funding, the Power of Attorney (POA) is taken as a risk containment measure only. The practice of taking POA is prevalent across the industry and is perfectly legal.”

He said JM Financial would fully cooperate with the apex bank in its special audit initiative and explain its position.