2024-10-21 14:11:37 :
Mumbai: Navi Finerv founder Sachin Bansal and management told lenders at an impromptu meeting on Friday that the company, which was barred from disbursing loans by the Reserve Bank of India (RBI) a day earlier, is capable of handling any situation arising out of this . Until March 2026.
On Thursday, the Reserve Bank of India banned Navi and three other non-bank lenders from disbursing loans, saying they were charging exorbitant interest rates. Earlier today (October 21), Reuters reported that the company had withdrawn its $Rs 100 crore bonds issued after RBI ban.
In a Powerpoint presentation on Friday, Navi management said the company’s debt service value $Rs 3,027 crore due over the next six months will be met by collecting payments from customers $40 billion rupees. The company also has strong liquidity buffers $1,500 crore and unencumbered cash $Rs 1,450 crore is required to process all immediate repayments, they added.
Also read: Tough times for NBFCs, says Piramal’s Sridharan
Saurabh Rungta, managing director and chief investment officer at Avendus Wealth Management, said: “The biggest problem facing these NBFCs is that lenders may stop lending to them or borrowing costs may spike significantly. One company in this list has a very Busy. “Strong movers and with ample liquidity, so we don’t think this will lead to an existential crisis that could at best hurt profitability or growth this year.” “
As of March 31, 204, 44 lenders, including State Bank of India, ICICI Bank, and Axis Bank, have provided loans to Navi, with the lender borrowing amount being $6,444.1 Crore Rs. $5,762.6 billion in the same period last year.
Navi’s core business is to provide up to $20 Lakhs with interest rates ranging from 9.9% to 45% per annum. As of June 30, its assets under management (AUM) were $11,725 crore, of which digital personal loans include $10,439 crore, according to Crisil. However, earnings were suppressed due to rising credit costs and operating expenses. The lender’s operating profit is $79 Crores and Interest Income $502 crore in the June quarter.
Also read: Tight liquidity forces Indian NBFCs to look overseas
Shobhit Agarwal, Head of Lending, Navi Finserv said, “At Navi Finserv, we are committed to conducting business operations with the highest standards of compliance, customer service and transparency. Following the instructions of the Reserve Bank of India, we are committed to resolving the outstanding issues and hope to resolve them at the earliest Having done so, the company also has sufficient liquidity and capital and we are fully committed to meeting our obligations and ensuring that we do not default on payments to our valued lenders and stakeholders.”
Existing loans are not affected
On Thursday, the Reserve Bank of India temporarily barred Navi Finserv, DMI Finance, Asirvad Micro Finance Ltd (backed by Manappuram Finance) and Arohan Financial Services Ltd from disbursing new loans from the close of business on October 21.
The RBI clarified that the restrictions apply only to new loans and the companies can continue to service existing customers and conduct collections as per regulatory guidelines.
The central bank’s crackdown follows months of intense scrutiny. In recent speeches and policy updates, Reserve Bank of India Governor Shaktikanta Das has repeatedly warned non-bank financiers and microfinance institutions about usurious interest rates.
Also read: RBI warns non-banking financial institutions that pursuit of growth at any cost threatens financial stability
“This action is based on significant regulatory concerns observed in these companies’ pricing policies, including the weighted average lending rate (WALR) and spreads charged relative to the cost of funds, which were found to be excessive and inconsistent with regulations. ,” the Reserve Bank of India said in a statement.
The regulator said the lender failed to comply with the Fair Practice Code, breached income assessment rules and ignored loan repayment capacity norms for microfinance borrowers. The inspection also uncovered issues related to loan evergreening, asset classification, gold loan portfolio practices and non-compliance with disclosure requirements, the report said. Additionally, some banks have outsourced core financial services, exacerbating regulatory risks, the RBI added.
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