India's central bank said on Monday it has removed restrictions it had imposed on non-banking finance company (NBFC) Navi Finserv against any fresh loan sanctions and disbursals with immediate effect.
Navi Finserv, started by e-commerce platform Flipkart founder Sachin Bansal, and three other NBFCs were barred in mid-October for their "usurious" pricing and charging a significant mark-up over their funding costs.
The NBFCs' pricing policies and the interest spread they charged were found to be excessive and did not adhere to regulations, the Reserve Bank of India had said.
The RBI has had several rounds of interaction with the company for rectification of deficiencies, it said in a release on Monday.
"Now, having satisfied itself based 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...the Reserve Bank has decided to lift the afore-mentioned restrictions placed on Navi Finserv," the RBI added.
Some Indian NBFCs are aggressively pursuing growth and chasing excessive returns on equity, which could pose financial stability risks, the central bank governor Shaktikanta Das had said in October.
Over the past year, the RBI has warned the financial sector against "all forms of exuberance", tightened rules for credit card and personal loans, made it more expensive for NBFCs to borrow from banks and imposed restrictions on non-compliant entities.