Action against select NBFCs including NBFCs-MFIs
Case Brief
The Reserve Bank of India issued directions under Section 45L(1)(b) of the RBI Act, 1934 to select NBFCs, including NBFCs-MFIs, requiring them to cease and desist from sanction and disbursal of loans. The action is effective from close of business on October 21, 2024. The release does not name the entities in the provided text, only indicates that the directions apply to the following NBFCs.
In exercise of powers under Section 45L(1)(b) of the RBI Act, 1934, the Reserve Bank of India directed the specified NBFCs to stop sanctioning and disbursing loans. The release indicates the action applies to select NBFCs including NBFCs-MFIs, effective from close of business on October 21, 2024.
Severity Assessment
This is a targeted cease-and-desist restriction on a specific core activity, which carries structural severity 3.
Affected NBFCs must stop sanctioning and disbursing loans from the stated effective time. This directly curtails their lending operations and affects borrowers who would otherwise receive fresh loan approvals or disbursements.
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