Bajaj Finance to bring down dependence on telemarketing calls: Sanjiv Bajaj

Clause 8 of its Code of Conduct (part of SEBI mutual fund regulations’ Fifth Schedule) says that ‘trustees and the asset management company shall maintain high standards of integrity and fairness in all their dealings and in the conduct of their business.’

Bajaj Finance aims to bring down the value of loans that are pushed through phone calls to less than 10 percent of its business, said Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, the parent of the finance company. Eventually, the firm wishes to reach a point where it will no longer call people and ask them if they wish to take a loan, he added.

“Our aim would ideally be to bring this business down to 10 percent, and then to zero percent…so that our calls will only be service calls,” said Bajaj, during a press conference at the launch of Bajaj Finserv Asset Management Company in Mumbai.

“All promotional activity will happen through our digital channels; that is where we want to go.”

Currently, around 15 percent of Bajaj Finance’s loan book has been built of loans that are solicited (or pushed) to customers. The company’s aggressive marketing push to build its loan book has made it the subject of social memes. To be sure, telemarketing calls to sell loans is widely practiced in India’s financial services industry.

Additionally, he said that in three months’ time, Bajaj Finserv’s website and its mobile application will have an option where borrowers and investors and clients can choose to never be “bothered again”.

“We want to give people the right to be forgotten by us,” said Bajaj. When asked whether the fund house’s customers would be besieged with calls from Bajaj Finserv about loans or insurance products, Bajaj said that many such calls originate from fake call centres.

“Institutional fraud is a very significant issue where people claim to be our employees and going out to customers. We recently busted 400-member organized fraud call center, just outside of Mumbai,” said Bajaj.

Bajaj said that data ought to be mined to only make products available to customers, “rather than pro-actively calling the customer.”

“The mutual fund will implement every norm of data protection and privacy that confirms to SEBI’s expectations,” he added.

What does SEBI say?

Bajaj Finserv AMC is not the only fund house in India that is part of a financial services conglomerate. While the market regulator the Securities and Exchange Board of India does not explicitly prohibit fund houses from sharing contact information of their clients with their sister firms, it expects them to “maintain privacy of investor information,” says a senior official at a rival fund house who did not wish to be named because he is not the official spokesperson.

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Clause 8 of its Code of Conduct (part of SEBI mutual fund regulations’ Fifth Schedule) says that ‘trustees and the asset management company shall maintain high standards of integrity and fairness in all their dealings and in the conduct of their business.’

Moreover, in 2020, SEBI had written to mutual funds, registrar and transfer agents (R&T) and the Association of Mutual Funds of India (AMFI; the MF industry’s trade body) on data privacy. It had instructed that fund houses, digital platforms that distribute and / or advise investors on mutual funds, R&Ts should adhere to data privacy of their clients. It specified that user data should not be shared between group entities managing multiple businesses or products. It also specified that products and services of group companies shall not be cross-marketed. Moneycontrol has a copy of this letter.

Bajaj Finserv AMC will soon announce the launch of its first set of schemes. Three of these are debt schemes (a liquid fund, an overnight fund and a money market fund) and three are equity-oriented (a balanced advantage fund, a large- and mid-cap fund and a flexi-cap fund). The fund house has also got an approval to launch an arbitrage fund.