RBI Lifts Supervisory Restrictions On DMI Finance, Asirvad Micro Finance; Check Details - News18
The Reserve Bank of India (RBI) on Wednesday announced regulatory relief for two microfinance companies, Asirvad Micro Finance and DMI Finance Private Limited, by lifting the supervisory restrictions imposed on them in October 2024. These restrictions had halted the sanctioning and disbursal of loans by the companies due to concerns over their pricing policies, as stated in a circular issued on January 8.
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The RBI’s actions in October 2024 were prompted by observations regarding the companies’ Weighted Average Lending Rate (WALR) and the Interest Spread charged over their cost of funds. These rates were found to be excessive and not aligned with regulatory guidelines, raising ‘material supervisory concerns’. Consequently, the central bank directed four NBFCs, including NBFC-MFIs, to halt all loan sanction and disbursal activities.
In its January 8 statement, the RBI explained its decision to lift the restrictions, citing satisfaction with the companies’ submissions, revamped processes, systems, and their commitment to ensuring adherence to Regulatory Guidelines. “Now, 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 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 statement said.
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