In a statement, the RBI expressed its satisfaction with the companies’ comments regarding their updated procedures and pledge to continuously follow regulatory rules.
According to a circular issued on January 8, the Reserve Bank of India removed supervisory limits on Asirvad Micro Finance and DMI Finance Private, clearing the way for significant regulatory relief for two microfinance organizations. The restrictions were placed on the “sanction and disbursal of loans” in October 2024.
The regulator had previously stated in October 2024 that it had seen issues with these companies’ pricing policies, namely with regard to their Weighted Average Lending Rate (WALR) and the Interest Spread levied above their cost of funds, which were deemed to be high and noncompliant with the rules. As a result, the RBI took action against the four NBFCs and NBFC-MFI, ordering them to cease all loan approvals and disbursements due to “material supervisory concerns.”
“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 RBI’s press release from January 8 stated.
Listed NBFC Manappuram Finance owns more than 98 percent of the MFI unit Asirvad Micro Finance. As part of its diversification strategy, Manappuram Finance purchased Asirvad Micro Finance in 2015.