"We strongly believe that there have been no material deficiencies in our loan sanctioning process. Further, the company has not violated applicable regulations," a spokesperson said in a statement on the RBI's action against JM Financial Products.

"We also wish to reaffirm that there have been no governance issues whatsoever and we conduct all our business and operational affairs in a bonafide manner."

India's central bank on Tuesday cited regulatory violations and governance concerns as reasons for its action against JM Financial Products.

The RBI reviewed the company's books, which showed it had repeatedly helped a group of its customers to bid for various IPO and non-convertible debenture offerings by using loaned funds.

The RBI has stepped up oversight of banks and non-bank finance companies over the last few years to ensure compliance of its norms and protect customer interest.

The central bank on Monday ordered non-bank finance company IIFL Finance to stop giving out gold loans, citing "material supervisory concerns" in its gold loan portfolio, sending its shares down 20% on Tuesday.

(Reporting by Nandan Mandayam in Bengaluru; Editing by Sonia Cheema)