Earlier this month, in RBI monetary policy committee meeting, governor Shaktikanta Das issued a strong warning to non-banking lenders, especially microfinance institutions and housing finance companies, for aggressively chasing “growth at any cost” that could threaten the economy’s financial stability.

The reason behind the ban is due to concern related to the pricing policy of these companies in terms of their lending rates, which are found to be excessive.

The Reserve Bank of India has banned four NBFCs from issuing new loans starting October 21, 2024, citing excessive lending rates and non-compliance wi

Reserve Bank of India on Thursday issued directions to Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited and Bansal-led Navi Finserv Limited. The RBI has asked the non-banking finance companies to “cease and desist from sanction and disbursal of loans” with effect from next week.

India’s central bank ordered four non-bank lenders, including Navi Finserv and DMI Finance, to halt loans from October 21, citing excessive interest rates and regulatory breaches.

The non-banks lenders include former Flipkart founder Sachin Bansal-led Navi Finserv, DMI Finance, Asirvad Micro Finance and Arohan Financial Services. The banking regulator says this action is based on material supervisory concerns observed in the Pricing Policy of these companies in terms of their Weighted Average Lending Rate (WALR) and the Interest Spread charged over their cost of funds,

The Reserve Bank of India (RBI) has barred four non-banking finance companies (NBFCs), including two microfinance institutions (MFIs), from sanctioning and disbursing loans for charging exorbitant interest rates to the borrowers.

Former Flipkart CEO Sachin Bansal has had a difficult relationship with the country's regulators, failing to get a banking license for his new venture, but his NBFC has now been dealt with another blow.

RBI orders four NBFCs, including Asirvad Micro Finance, Arohan Financial Services, DMI Finance, and Navi Finserv, to cease loan disbursals due to regulatory violations related to excessive pricing and improper borrower assessment.

Besides Navi Finserv, others who have been barred by the RBI include Asirvad Micro Finance, Arohan Financial Services and DMI Finance Private.