RBI Stops 4 NBFCs-MFI to sanction disburse loans after 21 October 2024 Including Navi Finserv Limited Asirvad Micro Finance Limited

RBI Acts Against NBFC: Banking sector regulator Reserve Bank of India has taken major action against four non-banking financial companies and micro finance companies. RBI has decided to stop sanctioning and disbursal of loans of four NBFC-MFIs from October 21, 2024. RBI has informed the four NBFCs about its decision under the supervisory order.

The Reserve Bank of India has banned the granting of loans to two micro finance companies, Chennai based Asirvad Micro Finance Limited and Kolkata based Arohan Financial Services Limited. Apart from this, two NBFCs including New Delhi based DMI Finance Private Limited and Bengaluru based Navi Finserv Limited have been banned from sanctioning and disbursing loans.

RBI said that this action has been taken due to material supervisory concerns in the pricing policy of these companies due to high interest spread on Weighted Average Lending Rate and Cost of Funds, which is in accordance with the Fair Practices Code of RBI. Not there.

RBI said, in the last few months, through different channels, regulated entities were asked to maintain transparency in small value loans. Despite this, they have adopted unfair and wrong practices. Even in the case of micro finance loans, regulatory guidelines related to household income and monthly repayment obligation have not been followed. These restrictions on these four NBFCs will be applicable from the closing of business on October 21, 2024. However, this restriction will not apply to the servicing, collection and recovery process of existing customers.

On October 9, 2024, RBI Governor Shaktikanta Das had said in his statement that RBI is keeping an eye on the functioning of some NBFCs and will not shy away from taking action.

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