Cease & desist: Reserve Bank of India's quick shift on NBFC curbs

On October 17, the Reserve Bank of India (RBI) directed four non-banking finance companies (NBFCs), including NBFC-MFIs, to ‘cease and desist’ from sanctioning and disbursing loans due to practices such as charging usurious interest rates, among others.  In December, the restriction was lifted for Navi Finserv, and this month, it was removed for the remaining three NBFCs – Arohan Financial, Asirvad Microfinance, and DMI Finance.  This marks the shortest period of business restrictions imposed in the last four years, a practice initiated when the policy for imposing such restrictions was introduced.  While it is still too early to determine if there has been a shift in stance regarding business restrictions under the new governor, Sanjay Malhotra, here is a timeline of previous embargoes and their subsequent removal.