The revocation of this ban is a positive development, especially considering it occurred in less than three months, which is significantly shorter than our initial base case assumption of six months. This may have been possible due to the constructive efforts made by Asirvad to work with the regulator to have the ban lifted.
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Motilal Oswal Report
Reserve Bank of India, in its Press Release dated January 08, 2025, shared that it has lifted the supervisory restrictions on Asirvad Micro Finance, a subsidiary of Manappuram Finance Ltd., with immediate effect. Earlier, on October 21,2024, RBI had directed Asirvad to halt the sanctioning and disbursement of loans. With this ban now lifted, Asirvad can resume both its MFI and gold loan business.
The regulator stated that Asirvad initiated remedial actions and submitted various compliances to RBI. In view of the company’s adoption of revamped processes and systems, as well as its commitment to ensuring adherence to regulatory guidelines on a regulatory basis, Asirvad was able to make the necessary changes to RBI’s satisfaction. Additionally, the company has committed to ensuring fairness in loan pricing.
The revocation of this ban is a positive development, especially considering it occurred in less than three months, which is significantly shorter than our initial base case assumption of six months. This may have been possible due to the constructive efforts made by Asirvad to work with the regulator to have the ban lifted.
Additionally, given that the MFI sector itself is going through a state of turmoil, we believe the regulator has shown empathy toward the four lenders (including Asirvad) who were previously served business bans.
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