On Monday, the Reserve Bank of India (RBI) lifted the restrictions on the sanction and disbursal of loans by Navi Finserv, which is owned by Sachin Bansal, with immediate effect. On October 17, the apex bank prohibited Navi Finserv, Asirvad Micro Finance, Arohan Financial Services, and DMI Finance from sanctioning and disbursing loans.
The restrictions were implemented due to material supervisory concerns regarding the pricing policies of these companies, specifically the interest margin levied over their cost of funds and the Weighted Average Lending Rate (WALR). These policies were determined to be excessive and noncompliant with regulations. The Reserve Bank of India has resolved to remove restrictions following numerous interactions with the company to address deficiencies.
“The Reserve Bank has decided to lift the aforementioned restrictions placed on Navi Finserv Limited with immediate effect, having satisfied itself based on the company’s submissions and in view of the company’s commitment to ensure adherence to the regulatory guidelines on an ongoing basis, particularly for ensuring fairness in the loan pricing, and the adoption of revamped processes and systems.” The restrictions on the other three companies have not been abolished despite the fact that Navi Finserv has been exempted from them.
The NBFC sector was cautioned by RBI governor Shaktikanta Das during the announcement of October’s monetary policy to avoid irresponsible growth, unjust business practices, and exorbitant interest rates charged by certain lenders. Consequently, these restrictions have been implemented. Navi Finserv stated in a statement that it has made significant efforts to rectify identified deficiencies and improve its processes and systems, which has met the RBI’s satisfaction.
“We are extremely appreciative of the Reserve Bank of India’s guidance and assistance throughout this process,” stated Sachin Bansal, CEO of Navi Finserv. “As we reinstitute our business operations, we are dedicated to upholding the highest standards of operational excellence and governance, particularly in the context of fair loan pricing.”
The company is dedicated to effectively addressing customer requirements and fostering financial inclusion with integrity as operations resume, according to the company. Navi Finserv, an RBI-registered NBFC in the middle layer category, was established in 2018 by Sachin Bansal and Ankit Agarwal. The company provides personal and housing loans. The company has become a significant participant in the UPI ecosystem, surpassing CRED to become the fourth-largest UPI player by volume in October.
