RBI lifts restrictions imposed on Asirvad Microfinance and DMI Finance

The Reserve Bank of India (RBI) on Wednesday lifted restrictions imposed on Chennai based Asirvad Micro Finance and Delhi based DMI Finance, with immediate effect, after being satisfied with the actions taken by these companies to adhere to regulatory guidelines.   

 

“…having satisfied itself based on companies’ submissions, and in view of their adoption of revamped processes, systems, and the companies’ commitment to ensure adherence to the regulatory guidelines on an ongoing basis, especially for ensuring fairness in the loan pricing, the RBI has decided to lift the afore-mentioned restrictions placed on both, Asirvad Micro Finance and DMI Finance, with immediate effect”, RBI said in a statement.

 

With this, the central bank has now lifted restrictions on all the four non-banking financial companies (NBFC) imposed in October for charging exorbitant interest rates to the borrowers.

 

RBI, in October, had imposed sanctions on Asirvad Microfinance, Arohan Financial Services, DMI Finance, and Flipkart co-founder Sachin Bansal’s Navi Finserv.

 

Previously, in early December, RBI had removed restrictions on Navi Finserv and early this month the central had removed restrictions imposed on Arohan Financial Services.

 

The action on these NBFCs by the RBI was 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.