Crackdown on four NBFCs: 14% spread on loans prompted RBI action

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On October 17, the Reserve Bank of India barred four NBFCs — Asirvad Micro Finance, Arohan Financial Services, DMI Finance, and Navi Finserv — from sanctioning and disbursing loans, citing usurious interest rates charged by them for their microfinance borrowers.

The four non-banking finance companies (NBFCs), including two microfinance institutions (MFIs), that faced regulatory wrath last week were mainly charging exorbitant rates to microloan borrowers from the most vulnerable sections, in order to maintain spreads of 14 per cent, sources familiar with the development said.

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Category: BusinessFinance

Markets: India

Topics: Rural indebtedness Microfinance Arohan Financial Services Private equity Microfinance industry NBFCs RBI Governor Shaktikanta Das Interest rates Reserve Bank of India Navi Finserv DMI Finance Asirvad Micro Finance Loan pricing Microloan borrowers

Source Website Secure: Yes (HTTPS)

News Sentiment: Neutral

Fact Checked: Legitimate

Article Type: News Report

Published On: 2024-10-20 @ 23:01:54 (12 hours ago)

News Timezone: GMT +5:00

News Source URL: business-standard.com

Language: English

Article Length: 101 words

Reading Time: 1 minutes read

Sentences: 4 lines

Sentence Length: 26 words per sentence (average)

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Copyright Owner: © Business Standard

News ID: 23139494

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