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    Question

    What action did the Reserve Bank of India (RBI) take

    against JM Financial Products Ltd. (JMFPL), and why was it taken?
    A Directed to cease gold loans Correct Answer Incorrect Answer
    B Imposed restrictions on IPO loans Correct Answer Incorrect Answer
    C Sanctioned a merger with another bank Correct Answer Incorrect Answer
    D Approved expansion of a coal mine Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    • The Reserve Bank of India has directed regulated entity JM Financial Products Ltd. (JMFPL) to cease and desist, with immediate effect, from doing any form of financing against shares and debentures, including sanction and disbursal of loans against Initial Public Offering (IPO) of shares or against subscription to debentures as the entity has been found violating regulatory guidelines. • According to the RBI, It was observed that the company repeatedly helped a group of its customers to bid for various IPO and NCD offerings by using loaned funds. • The credit underwriting was found to be perfunctory, and financing was done against meagre margins. Learn Along About RBI Founded: 1 April 1935                                    Headquarters: Mumbai                                     Governor: Shaktikanta Das

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