RBI removes lending restrictions on Navi Finserv
The Reserve Bank of India (RBI) removed the lending restrictions imposed on NBFC Navi Finserv on Monday, according to a statement issued by the central bank.
On October 17, the regulator had imposed restrictions on Navi Finserv and three other NBFCs for violation of lending norms.
“RBI had several rounds of interaction with the company for rectification of deficiencies. Now, having satisfied on company’s submissions, and in view of adoption of revamped processes, systems, and the company’s commitment to ensure adherence to the Regulatory Guidelines on an ongoing basis, especially for ensuring fairness in the loan pricing, the Reserve Bank of India has decided to lift the afore-mentioned restrictions placed on Navi Finserv Limited, with immediate effect,” the regulator said.
The RBI had said that its action on Navi and other NBFCs was based on material supervisory concerns observed in the pricing policy of these companies in terms of their Weighted Average Lending Rate (WALR) and the interest spread charged over their cost of funds, which were found to be excessive.
Further, their pricing policy was not in adherence with the regulations as laid down in the Master Direction (MD) relating to regulatory framework for microfinance loans and MD relating to NBFC-scale based regulation. The pricing policy was also found to be not in conformity with the provisions laid down under Fair Practices Code issued by the Reserve Bank, per an RBI statement.