Asirvad Microfinance has issued a statement in response to the Reserve Bank of India’s (RBI) recent directives, which placed restrictions on the company’s ability to sanction and disburse loans. The RBI’s action, effective from October 21, 2024, is part of a wider regulatory measure targeting four Non-Banking Financial Companies (NBFCs) for non-compliance with specific guidelines.
In its statement, Asirvad Microfinance emphasized its commitment to addressing the concerns raised by the RBI and ensuring full compliance. The company highlighted that the matter has been swiftly brought to the attention of its Board of Directors, who have convened an urgent meeting to formulate immediate corrective actions.
Key Highlights from the Statement:
- Asirvad Microfinance acknowledged the RBI’s feedback and areas for improvement, stressing that they take these matters with the utmost seriousness.
- The company is preparing a detailed action plan, which will be submitted to the RBI within the stipulated timeline.
- The Board reaffirmed its commitment to implementing the RBI’s directions in letter and spirit while closely monitoring the corrective actions through a time-bound plan.
- In addition to addressing the specific observations made by the RBI, the company plans to conduct a comprehensive review of its governance, risk management, and regulatory compliance frameworks.
The RBI’s order to cease loan disbursals comes amid concerns about non-compliance with regulatory guidelines, particularly regarding Pricing Policies, Weighted Average Lending Rates (WALR), and interest spreads. Asirvad Microfinance reassured that it remains focused on providing robust customer service to its existing customers, while it works diligently to align with the RBI’s directives.
The restrictions imposed by the RBI will remain in effect until the company successfully addresses the identified issues and demonstrates its commitment to compliance. Meanwhile, Asirvad Microfinance will continue servicing its existing customers, managing collections, and adhering to the regulatory framework.
