India’s central financial institution ordered 4 non-bank lenders, together with Navi Finserv and DMI Finance, to halt loans from October 21, citing extreme rates of interest and regulatory breaches.
The Reserve Financial institution of India said (PDF) the companies violated guidelines on pricing, revenue evaluation, and asset classification. This motion follows months of warnings about accountable lending practices, it added. The affected firms can proceed servicing present clients however should implement remedial measures to renew new lending.
Many startups and enormous tech companies, together with Google, work with DMI Finance to increase loans to their clients.
The information can also be the most recent setback for Navi, a Bengaluru-based startup based by Flipkart co-founder Sachin Bansal. The central financial institution earlier rejected Navi’s application for a banking license.
The brand new order comes at a time when Navi has been in talks with traders to raise its maiden external funding, TechCrunch earlier reported.
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