RBI removes supervisory restrictions on Arohan Financial Services

On January 3, 2025, the Reserve Bank of India (RBI) announced the removal of supervisory restrictions on Kolkata-based Arohan Financial Services Ltd. The restrictions, which had been imposed on October 17, 2024, required the company to cease sanctioning and disbursing loans from October 21, 2024.

Following the RBI’s directive, Arohan took remedial action, submitting its compliance details and revamping its processes and systems. Satisfied with the company’s submissions and its commitment to fair loan pricing, the RBI lifted the restrictions effective immediately.

The curbs had also been imposed on other financial firms, including Asirvad Micro Finance Limited, DMI Finance Private Limited, and Navi Finserv Limited, with the latter’s restrictions recently being lifted.

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Arohan provides loans primarily to financially underserved women. Arohan’s flagship loan is aimed at groups of three to five women and has a rate of 24.25%, according to the lender’s website. The loan ranges between ₹25,000 and ₹1 lakh and is for a tenure of 24-30 months.

The company, backed by investors like Teachers Insurance and Annuity Association of America and Danish asset manager Maj Invest, had delayed its $200-million IPO in October 2024 due to the RBI curbs.