Factbox: India's central bank begins unwinding curbs on NBFCs and banks

IIFL Finance

12/02/2025 12:20

(Adds RBI lifting restrictions on Kotak Mahindra Bank)
       Jan 9 (Reuters) - The Reserve Bank of India has started
to ease curbs on non-banking financial companies (NBFCs) and
banks after they improved their compliance following a series of
supervisory restrictions.
    High interest rates and tighter regulations have been cited
as contributors to weak demand and a slowdown in India's
economic growth, including by the federal finance ministry in a
recent report.
    The Indian central bank also got a new chief in December
with Sanjay Malhotra taking over from Shaktikanta Das.
    The following is a list of companies whose restrictions have
been removed by the RBI.
    
    KOTAK MAHINDRA BANK
        The Reserve Bank of India on Wednesday 
    lifted restrictions
     on Kotak Mahindra Bank  KTKM.NS  that had barred the lender
from  taking on new customers via its online and mobile banking
channels, and from issuing new credit cards.
  
        RBI had 
    imposed business restrictions on the lender
    , asking it to stop adding clients through its online and
mobile banking channels and issuing credit cards due to gaps in
its IT infrastructure.
  


ASIRVAD MICRO FINANCE, DMI FINANCE, AROHAN FINANCIAL SERVICES,
NAVI FINSERV
    The RBI, last month, removed restrictions imposed on DMI
Finance and Manappuram Finance-owned  MNFL.NS  Asirvad Micro
Finance with immediate effect.
    The regulator had in October barred the two companies, along
with Arohan Financial Services and Navi Finserv, from
sanctioning and disbursing loans due to "usurious" pricing and
charging a significant mark-up over their funding costs.
    The same restrictions on Arohan were lifted last week, and
from Navi in December.


EDELWEISS ASSET RECONSTRUCTION, ECL FINANCE
    The central bank last month lifted restrictions on Edelweiss
Asset Reconstruction and ECL Finance, first imposed in May 2024,
which barred them from acquiring financial assets or undertaking
structured transactions.
    The regulator was satisfied with the measures taken to
address what it had called "evergreening" of distressed loans.


JM FINANCIAL
    A unit of financial services firm JM Financial  JMSH.NS  in
October resumed financing activities related to shares and
debentures, including loans for IPO subscriptions after the
central bank ended restrictive measures.
    The RBI in March barred JM Financial Products from issuing
such loans, due to regulatory violations and governance
concerns.


IIFL FINANCE
    In September, the RBI permitted IIFL Finance to resume
issuance of gold loans. 
    The central bank had barred it from offering gold loans in
March, citing concerns about its assessment of gold collateral
and violations of the maximum permitted loan-to-value ratio,
among other issues.


BAJAJ FINANCE
    The RBI in May reversed curbs imposed on India's largest
NBFC, Bajaj Finance, allowing it to restart loan disbursals
under two of its lending products.
    The restrictions were levied in November 2023 due to
non-adherence with the central bank's digital lending
guidelines.

 (Reporting by Nandan Mandayam and Kashish Tandon in Bengaluru;
Editing by Varun H K)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))