Case Brief
What Happened
The Reserve Bank of India cancelled the Certificates of Registration of 35 companies under Section 45-IA(6) of the RBI Act, 1934. The order lists 35 NBFCs, many based in Chennai and other Tamil Nadu locations, and states that the affected companies shall not transact the business of a Non-Banking Financial Institution as defined in the RBI Act. This is a fresh cancellation action affecting all 35 named entities.
Quick Facts
- Primary Impact
- License cancellation
- Entity Type
- NBFC
- Location
- Chennai, Tamil Nadu
- Order Date
- 4 Jun 2018
- Effective From
- 4 Jun 2018
- Entities Affected
Why RBI Acted
The Reserve Bank of India exercised its powers under Section 45-IA(6) of the Reserve Bank of India Act, 1934 to cancel the Certificate of Registration of 35 named companies. As a result, these entities are no longer permitted to transact the business of a Non-Banking Financial Institution as defined under clause (a) of Section 45-I of the RBI Act, 1934.
Severity Assessment
Cancellation of Certificates of Registration is a full license cancellation, which falls in severity 5 regardless of any monetary amount.
Impact
Each of the 35 companies is barred from carrying on non-banking financial business going forward. They must cease NBFC operations and cannot legally transact as non-banking financial institutions after the respective cancellation dates stated in the release.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 45-I(a) of the RBI Act, 1934
Restrictions & Effective Timeline
- Effective From
- 4 Jun 2018
Affected Entities
- Aristo Finance and Investments LimitedNBFC · Primary
Published as Aristo Finance and Investments Limited
- Ishwarya Lakshmi Finance Private LimitedNBFC · Bulk Member
Published as Ishwarya Lakshmi Finance Private Limited
- Karthikeya Finance LimitedNBFC · Bulk Member
Published as Karthikeya Finance Limited
- MGS Investments Private LimitedNBFC · Bulk Member
Published as MGS Investments Private Limited
Official RBI Source
RegOversight structures the official RBI release for search and analysis. Use the linked release as the authoritative source.