Why did the Reserve Bank of India (RBI) impose business restrictions on four…
2024
Why did the Reserve Bank of India (RBI) impose business restrictions on four non-banking finance companies (NBFCs), including Asirvad Micro Finance Ltd and Navi Finserv Ltd (in October 2024)?
- A.
Non-compliance with loan recovery practices
- B.
High levels of non-performing assets (NPAs)
- C.
Excessive interest rates and pricing policy violations
- D.
Failure to maintain adequate capital reserves
- E.
Violation of anti-money laundering guidelines
Show answer & explanation
Correct answer: C
RBI restricted the four NBFCs because their pricing policies and interest spreads were found excessive and not in adherence with regulations. Therefore the reason was excessive interest rates and pricing policy violations.