The Reserve Bank of India (RBI) has ordered four Non-Banking Financial Companies (NBFCs), including DMI Finance and NAVI, to stop sanctioning and disbursing loans starting October 21. This directive comes in light of the RBI’s findings regarding excessive pricing practices and non-compliance with guidelines for assessing household income and monthly obligations related to microfinance loans.
The other two NBFCs affected by this directive are Asirvad Micro Finance and Arohan Financial Services, both of which have received detailed supervisory orders from the RBI. These measures indicate the central bank’s commitment to ensuring fair practices within the financial sector, particularly concerning microfinance, which plays a critical role in providing financial access to underserved populations.
The RBI has stated that it will reconsider the imposed restrictions once the NBFCs demonstrate compliance with essential guidelines pertaining to pricing policy, risk management, customer service, and grievance redressal. This step reflects the RBI’s ongoing efforts to uphold the integrity of the financial system and protect consumer interests amid rising concerns about predatory lending practices.
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