Navi Finserv, the digital lending platform of Flipkart founder Sachin Bansal, along with three other financial service providers -- Asirvad Micro Finance, Arohan Financial Services, and DMI Finance-- have been banned by the RBI from disbursing loans due to exorbitant lending rates.

The Reserve Bank of India has banned four NBFCs from issuing new loans starting October 21, 2024, citing excessive lending rates and non-compliance with regulations.

Reserve Bank of India on Thursday issued directions to Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited and Bansal-led Navi Finserv Limited. The RBI has asked the non-banking finance companies to “cease and desist from sanction and disbursal of loans” with effect from next week.

Besides Navi Finserv, others who have been barred by the RBI include Asirvad Micro Finance, Arohan Financial Services and DMI Finance Private.

RBI orders four NBFCs, including Asirvad Micro Finance, Arohan Financial Services, DMI Finance, and Navi Finserv, to cease loan disbursals due to regulatory violations related to excessive pricing and improper borrower assessment.

The non-banks lenders include former Flipkart founder Sachin Bansal-led Navi Finserv, DMI Finance, Asirvad Micro Finance and Arohan Financial Services. The banking regulator says this action is 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,