Quick Summary
The Reserve Bank of India, in exercise of its powers under Section 45L(1)(b) of the Reserve Bank of India Act, 1934, issued Directions to the following NBFCs to cease and desist from sanction and disbursal of loans, effective from close of business of October 21, 2024: Sl. No. Name NBFC
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FAQ :
The NBFCs banned are Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited, and Navi Finserv Limited.
The ban came into effect from the close of business on October 21, 2024.
The RBI took action due to supervisory concerns regarding excessive pricing policies, specifically the Weighted Average Lending Rate (WALR) and interest spread, which were not in adherence with regulatory guidelines. Other issues included non-compliance with income assessment, repayment obligations, loan evergreening, and disclosure requirements.
Yes, these business restrictions do not prevent the companies from servicing their existing customers and carrying out collection and recovery processes as per regulatory guidelines.
Yes, the RBI will review these restrictions upon receiving confirmation from the companies that they have taken suitable remedial action to comply with regulatory guidelines.
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