RBI lifts curbs imposed on NBFCs Asirvad Micro Finance, DMI Finance

The RBI has removed restrictions placed on two NBFCs -- Asirvad Micro Finance Limited, Chennai, and DMI Finance Private Limited, New Delhi. The restrictions were lifted based on companies’ submissions and given their adoption of revamped processes, and systems, and the companies’ commitment to ensure adherence to the regulatory guidelines. 

"The Reserve Bank has decided to lift the afore-mentioned restrictions placed on both, Asirvad Micro Finance Limited and DMI Finance Private Limited, with immediate effect. The business restrictions that were imposed on two other NBFCs vide Reserve Bank’s orders dated October 17, 2024, viz. Navi Finserv Pvt Ltd and Arohan Financial Services Limited have been lifted vide our orders dated December 2, 2024, and January 3, 2025, respectively," the RBI said in its statement. 

The development comes following the RBI removed supervisory restrictions placed on Arohan Financial Services last week. The RBI had earlier directed the NBFC to "cease and desist" from sanction and disbursal of loans, effective from October 21, 2024. Along with Arohan Financial Services, the curbs were also placed on three more NBFCs, Asirvad Micro Finance, DMI Finance Private Ltd, and Navi Finserv Limited. 

The action against these NBFCs 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. 

Over the last few months, the Reserve Bank has been sensitising the regulated entities through various channels on the need to use freedom "responsibly and ensure fair, reasonable and transparent pricing", especially for small-value loans. However, the central bank has observed unfair and usurious practices during its onsite examinations. 

The RBI had also decided to lift the restrictions placed on former Flipkart co-founder Sachin Bansal-led Navi Finserv on December 2, 2024. The RBI said it had several rounds of interaction with the company for the rectification of deficiencies, and after having satisfied itself based on the company’s submissions, the curbs were lifted.