Reserve Bank of India: Giving a big relief to two microfinance banks Ashirwad Micro Finance Limited and DMI Finance Private Limited, the Reserve Bank of India has removed the ban imposed on them from giving loans. This information was given in the circular issued on January 8.
In the month of October last year, RBI had taken strict action against Ashirwad Micro Finance Limited, Aarohan Financial Services Limited, DMI Finance Private Limited, Navi Finserv Limited and banned the approval and distribution of new loans. This action was taken to collect more interest from the loan takers.
During that time, regarding strict action against NBFCs, RBI said, “This decision is being taken on the basis of RBI’s investigation, which found that recovery of these companies on average lending rate (WALR) and their cost of funds.” The interest being paid has been found to be very high, which is a violation of the regulation.”
Companies promised to follow regulations
Now issuing a press statement on January 8, the Reserve Bank of India said, the companies have ensured to follow the rules in their documents submitted, make appropriate improvements, especially give loans at reasonable interest, hence the Reserve Bank has given its blessings. It has been decided to lift the ban on loan approval and distribution on both Micro Finance Limited and DMI Finance Private Limited with immediate effect.
Manappuram Finance has major stake in Ashirvad Micro Finance
Let us tell you that Manappuram Finance has 95 percent stake in Ashirwad Micro Finance, which is among the major listed non-banking finance companies (NBFC) of the country, while the remaining 5 percent stake is with the founder of Ashirwad Micro Finance. p style="text-align: justify;">After the RBI decision in October, SEBI gave a blow to Manappuram’s subsidiary company Ashirwad Micro Finance and put its IPO on hold. The company’s target was to raise Rs 1500 crore through this IPO. For this, the company had also submitted preliminary documents to SEBI in October 2023. Manappuram Finance had taken 71 percent stake in Ashirwad Micro Finance in 2015 and later it was increased to 95 percent in June 2022.
Restrictions have already been lifted
Let us inform you that the ban imposed on Aarohan Financial Services Limited and Navi Finserv has already been removed by RBI in December 2024 and January 2025 respectively.
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