Bajaj Finance Pioneers 'Right to be Forgotten' Amidst Telemarketing Backlash
Bajaj Finance's Push for Digital Channels Signals a New Era in Customer Engagement
9 June 2023
Sanjiv Bajaj, chairman of Bajaj Finserv Ltd, faced criticism for proposing the "right to be forgotten" by Bajaj Finance, allowing customers to opt out of unsolicited calls.
The aim is to reduce the percentage of business generated through telemarketing calls from 15% to 10% and eventually to zero, emphasizing digital channels for promotions and service-oriented calls.
Bajaj Finance reported a 30% YoY jump in profits for the quarter ending March, demonstrating strong growth in core assets under management (AUM) and customer acquisition.
Sanjiv Bajaj, the Chairman and Managing Director of Bajaj Finserv Ltd, has recently faced backlash on Twitter for his comments regarding the "right to be forgotten" by Bajaj Finance. He announced that within the next three months, customers would be given the option to opt out of unsolicited calls from Bajaj Finance representatives through their website and app. This decision comes at a time when the Telecom Regulatory Authority of India (TRAI) has been urging telecom companies to address the issue of unsolicited commercial communications, which often result in fraud and scams.
Bajaj's objective in implementing this feature is to reduce the percentage of business generated through telemarketing calls, currently at 15%, to 10% initially, and eventually to zero. The organization aims to prioritize digital channels for promotional activities while ensuring that their calls serve the purpose of providing services. By leveraging digital platforms, Bajaj Finance intends to offer customers a seamless experience while reducing their reliance on telemarketing as a means of generating business.
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Bajaj Finance's financial report for the quarter ending in March demonstrated impressive growth, with profits increasing by 30% year-on-year, reaching Rs 3,158 crore compared to the previous year's Rs 2,420 crore. The company experienced strong growth in core assets under management (AUM) and acquired 30.90 lakh new customers during the quarter. These positive results underscore Bajaj Finance's position as a leading non-banking financial company (NBFC), reflecting its strong performance across various financial and portfolio metrics.
In response to Sanjiv Bajaj's announcement, the Reserve Bank of India (RBI) stated that they are examining the issue. RBI Deputy Governor MK Jain emphasized the need for TRAI to address the matter of telemarketing calls. While individual banks have the autonomy to make decisions regarding telemarketing, RBI acknowledges the importance of TRAI's involvement in resolving the issue. Bajaj's proposal to grant customers the "right to be forgotten" has sparked discussions concerning the overall regulation and management of telemarketing practices.
Following the news of Bajaj Finance's initiative, the company's share price experienced a slight decline, with Bajaj Finance's shares closing at ₹7007.70 apiece, down by ₹72.70 or 1.03%. Similarly, Bajaj Finserv's shares closed at ₹1467.40 apiece, down by ₹13.65 or 0.92%. In a separate development, the RBI opted to maintain the status quo by keeping the policy rates unchanged for the second consecutive time. All six members of the monetary policy committee voted to maintain the repo rate at 6.50%, along with the standing deposit facility (SDF) at 6.25%, the marginal standing facility (MSF) rate, and the Bank Rate at 6.75%.