The action against the unit of investment banking firm JM Financial is the latest in the regulator's crackdown on non-bank lenders.

The financial services firm has been barred from giving out loans against initial public offering of shares and against subscription to bonds, but it can continue to service existing loan accounts through the usual collection and recovery process, the Reserve Bank of India (RBI) said.

"This action is necessitated due to certain serious deficiencies observed in respect of loans sanctioned by the company for IPO financing as well as NCD (Non-convertible debenture) subscriptions," the RBI said.

The central bank reviewed the company's books, which showed it had repeatedly helped a group of its customers to bid for various IPO and NCD offerings by using loaned funds.

However, the credit underwriting was found to be "perfunctory," and financing was done against meagre margins, the RBI said.

"Apart from being in violation of regulatory guidelines, there are serious concerns on governance issues in the company," the RBI said.

JM Financial did not immediately respond to a Reuters' request for comment.

The RBI on Monday ordered non-bank finance company IIFL Finance to stop giving out gold loans, citing "material supervisory concerns" in its gold loan portfolio.

(Reporting by Chris Thomas in Bengaluru; Editing by Janane Venkatraman)