India's central bank has ordered four non-bank lenders to stop new loans effective October 21, citing excessive interest rates and regulatory violations, including pricing rules.
The Reserve Bank of India indicated that the affected lenders violated key rules regarding pricing, income assessment, and asset classification, emphasizing the importance of responsible lending practices.
While DMI Finance and Navi Finserv halt new loans, they may still service existing customers, provided they undertake the necessary remedial actions to comply with regulations.
The central bank's actions have significant implications, especially for Navi, a startup recently rejected for a banking license and currently seeking its first round of external funding.
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