RBI Cracks Down on Non-Banking Lenders Over Pricing Concerns

The Reserve Bank of India has ordered Navi Finserv and three other NBFCs to halt loan operations due to concerns over excessive pricing and regulatory non-compliance. The entities must address these issues to resume business, as part of RBI's push for fair financial practices.

The Reserve Bank of India has taken stringent action against four non-banking financial companies, including Navi Finserv, by ordering a halt to their loan processes. This move comes amid concerns over their pricing policies and adherence to existing financial regulations, as per RBI's recent statement.

The central bank highlighted issues such as excessive Weighted Average Lending Rates and interest spreads that surpassed regulated norms. Moreover, the NBFCs were found violating the Fair Practices Code, raising serious compliance questions.

While Navi Finserv has stated its commitment to addressing RBI's concerns, other affected companies have yet to comment. These restrictions will remain until the firms implement remedial measures to comply with RBI's guidelines and ensure fair lending practices.

(With inputs from agencies.)