These four entities are Asirvad Microfinance, Arohan Financial Services (also an MFI), DMI Finance, which provides personal, consumption, and micro, small and medium enterprises loans, and Flipkart co-founder Sachin Bansal's Navi Finserv, which offers home and personal loans.
The ban will take effect on October 21 to "facilitate closure of transactions in the pipeline", the regulator said in a statement.
In the monetary policy statement on October 8, RBI Governor Shaktikanta Das cautioned NBFCs, including MFIs, about prioritising excessive equity returns. He expressed concern over exorbitant interest rates coupled with high processing fees and frivolous penalties.
"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, which are found to be excessive and not in adherence with the regulations," the RBI said while citing reason for its action on Thursday.
This story is from the October 18, 2024 edition of Business Standard.
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This story is from the October 18, 2024 edition of Business Standard.
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