Navi Finserv and three other NBFCs barred by RBI from sanctioning and disbursing loans.
Four non-banking finance companies (NBFCs), including two microfinance institutions (MFIs), have been barred by the Reserve Bank of India (RBI) from sanctioning and disbursing loans for charging exorbitant interest rates from borrowers.
These four entities are: Ashirvad Microfinance, Arohan Financial Services (also an MFI), and DMI Finance, which provides loans for personal consumption and micro, small and medium enterprises.
Apart from this, Flipkart co-founder Sachin Bansal’s Navi Finserv, which provides home and personal loans.
This restriction will come into effect from October 21 to facilitate the closing of transactions that are in the pipeline.
This action is based on material supervisory concerns observed in the pricing policy of these companies in respect of their weighted average lending rate (WALR) and interest spread charged on their cost of funds, which have been found to be excessive and not in conformity with the regulations.
