India's central bank said on Wednesday it has removed restrictions imposed on non-banking financial companies (NBFCs), Asirvad Micro Finance and DMI Finance, against any fresh loan sanctions and disbursals with immediate effect.
The Reserve Bank of India (RBI) in October barred four NBFCs, including Manappuram Finance's unit Asirvad Micro Finance as well as DMI Finance, from issuing loans due to "usurious" pricing and high markups.
RBI said, in response to its action, the companies initiated remedial measures and submitted compliance reports, satisfying the regulator, particularly regarding fairness in loan pricing.
The central bank now has lifted sanctions on all four NBFCs that were barred from disbursing loans in October. The RBI had previously removed lending restrictions on Navi Finserv and Arohan Financial Services.
Over the past year, the RBI has warned the financial sector against "all forms of exuberance" and tightened the rules for credit card and personal loans.
The central bank has also made it more expensive for NBFCs to borrow from banks and imposed restrictions on non-compliant entities.
