Reserve Bank Cancels Certificate of Registration of Baba Farid Investment Private Limited, Kotkapura
Case Brief
On August 18, 2004, the Reserve Bank of India cancelled the certificate of registration of Baba Farid Investment Limited, Kotkapura, under Section 45IA of the RBI Act, 1934. The release says the cancellation followed the company’s decision to exit the non-banking financial institution business. As a result, the company cannot transact NBFC business, but it remains responsible for repaying public deposits according to the terms and conditions of the deposit contracts.
The Reserve Bank of India cancelled the certificate of registration granted to Baba Farid Investment Limited, Kotkapura, for carrying on the business of a non-banking financial institution. The release states that the cancellation was made because the company opted to exit the business. The action was taken under Section 45IA of the RBI Act, 1934. Following cancellation, the company cannot transact the business of a non-banking financial institution and remains obligated to repay public deposits as per the deposit contract terms.
Severity Assessment
Cancellation of an NBFC's registration is a severity-5 action because it removes the entity's authorization to operate as a non-banking financial institution.
Baba Farid Investment Limited is barred from carrying on NBFC business going forward. Public depositors are still to be repaid under the terms of their contracts, and the cancellation affects the company’s ability to operate as a non-banking financial institution.
Published as Baba Farid Investment Limited
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