RBI Halts Loan Sanctions for Four Finance Firms Over High Interest Rates
The RBI has banned four finance companies, including Navi Finserv and DMI Finance, from sanctioning new loans over excessive interest rates, following a warning from the RBI governor. The move impacts Asirvad Micro Finance and Arohan Financial Services as well.
RBI Halts Loan Sanctions for Four Finance Firms Over High Interest Rates
The Reserve Bank of India (RBI) has banned four financial companies, including Navi Finserv, led by Sachin Bansal, and DMI Finance, backed by Mitsubishi UFJ Financial Group, from sanctioning and disbursing new loans. This decision comes after these firms were found to be charging excessive interest rates. The move follows a recent warning by the RBI governor regarding unethical lending practices.
The other two companies facing this ban are Asirvad Micro Finance Ltd, promoted by Manappuram Finance, and Kolkata-based MFI Arohan Financial Services Ltd. The RBI's action underscores the regulator’s commitment to protecting consumers from predatory lending practices and ensuring transparency in the financial sector.
The central bank's decision highlights its focus on curbing the rising concerns over high lending rates, especially among non-banking financial companies (NBFCs) and microfinance institutions, to prevent exploitation of borrowers.
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