RBI Lifts Restrictions On Sachin Bansal-Led Navi Finserv Immediately

The Reserve Bank of India on Monday lifted the restrictions on Navi Finserv, led by Sachin Bansal, after the non-banking financial company adopted revamped systems and processes to ensure regulatory compliance.

The country's central bank in October had prohibited Navi Finserv, Asirvad Micro Finance, Arohan Financial Services, and DMI Finance from sanction and disbursal of loans due to concerns over high lending rates.

The RBI took this action after it observed that the weighted average lending rate and the interest spread charged over their cost of funds were excessive and not in adherence with the regulations.

"Having satisfied itself based on company’s submissions, and in view of adoption of revamped processes, systems, and the company’s commitment to ensure adherence to the Regulatory Guidelines on an ongoing basis, especially for ensuring fairness in the loan pricing, the Reserve Bank has decided to lift the afore-mentioned restrictions placed on Navi Finserv Limited, with immediate effect," RBI said in a statement.

The move had come as the central bank over the past few months had sensitised lenders on the need to use their regulatory freedom responsibly and ensure fair, reasonable, and transparent pricing, especially for small-value loans. These restrictions also come as the RBI Governor Shaktikanta Das, during the announcement of October's monetary policy had warned the NBFC sector against imprudent growth, unfair business practices, and usurious interest rates charged by certain outliers.

The RBI is closely monitoring these areas of concern and will not hesitate to take appropriate action if necessary, he said, adding that self-correction by NBFCs would, however, be the desired option.

Previously in September, the central bank had lifted restrictions on IIFL Finance's gold loan business. The banking regulator had imposed curbs on the non-bank lender's gold business on March 4, citing serious operation lapses.