RBI Removes Business Restrictions On Asirvad Microfinance, DMI Finance
The RBI's decision to lift lending restrictions on Asirvad Micro Finance and DMI Finance followed a review of their revised processes, ensuring they meet the regulatory standards.
The Reserve Bank of India has lifted lending restrictions on Asirvad Micro Finance and DMI Finance Private Limited with immediate effect, the central bank said in a statement.
The restrictions were removed after the RBI was satisfied with both the companies’ submissions and their adoption of revamped processes and systems and commitment to ensure adherence to the regulatory guidelines on an ongoing basis, it said.
On Oct. 17, the RBI had asked four non-banking financial companies—Asirvad Micro Finance, Navi Finserv, Arohan Financial Services, and DMI Finance—to cease and desist from sanctioning and disbursing loans from Oct. 21 as it found material supervisory concerns in relation to high lending rates.
RBI had taken 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.
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.
Apart from these two companies, RBI has also lifted lending restrictions on Navi Finserv, Arohan Financial Services, ECL Finance, and Edelweiss Asset Reconstruction Company last month.
