JM Financial shares surged 6 percent in the morning session on October 21 despite a muted market sentiment as the Reserve Bank of India has lifted restrictions from its subsidiary JM Financial Products Ltd from financing against shares and debentures.
At 10 AM, shares of JM Financial were quoting Rs 163.58, higher by 3 percent on the NSE, after trimming early gains.
"With this communication, the company is permitted to provide, with immediate effect, the financing against shares and debentures in compliance with all applicable laws and regulations," JM Financial said in an exchange filing. "The company is committed to upholding the highest standards of compliance and will continue to ensure that the remediations carried out by it are sustained."
In March, the RBI barred JM Financial Products Ltd (JMFPL) from giving loans against shares and debentures, including sanction and disbursal of loans against the Initial Public Offering (IPO) of shares, with immediate effect.
The action was taken after observing certain serious deficiencies in the financial services firm's loan process, the RBI had said. More importantly, the central bank highlighted that there are serious concerns on the governance issues in the company, apart from violation of regulatory guidelines.
Over the past year, despite the clampdown from the RBI, shares of JM Financial have surged over 100 percent, more than doubling investors' wealth.
0 Comment