New Delhi: Reserve Bank of India (RBI) has prohibited four non-banking financial companies (NBFCs), including Asirvad Micro Finance – a subsidiary of Manappuram Finance, from sanctioning or disbursing loans, effective from October 21, 2024. The other three NBFCs are Arohan Financial Services Limited, DMI Finance Private Limited and Navi Finserv Limited.
The central bank took the decision after it found discrepancy in the Pricing Policy of these companies in terms of their Weighted Average Lending Rate (WALR) and the Interest Spread charged over their cost of funds, which are found to be excessive, not in adherence with the regulations, and to be not in conformity with the provisions laid down under Fair Practices Code issued by the Reserve Bank.
Following the RBI decision, Mannapuram Finance share price dropped nearly 13 per cent and closed at 154.30 on October 17. Several brokerages downgraded the stock after the RBI action. Brokerage firm CLSA reduced the Mannapuram Finance share target price while Morgan Stanley downgraded its rating from overweight to equalweight and also reduced the target. Jefferies, which downgraded the stock to “hold” and cut its price target to ₹167 on the stock.
