Cancellation of the certificate of registration
Case Brief
The Reserve Bank of India, acting under Section 45-IA(6) of the RBI Act, 1934, cancelled the certificate of registration of Tulunadu Finance & Developments Ltd. with effect from January 31, 2002. The company, based in Udupi, can no longer transact NBFC business as defined under the Act. RBI also imposed additional restrictions under Section 45MB(1) and 45MB(2), barring acceptance of deposits and alienation of assets without prior permission from the Reserve Bank.
The Reserve Bank of India cancelled the certificate of registration of Tulunadu Finance & Developments Ltd. under Section 45-IA(6) of the RBI Act, 1934. As a consequence, the company cannot carry on the business of a non-banking financial institution as defined in Section 45-IA(a). RBI further prohibited the company from accepting deposits under Section 45MB(1) and from alienating its assets under Section 45MB(2) without prior permission of the Reserve Bank.
Severity Assessment
Cancellation of a certificate of registration is a full licensing action, which falls in severity 5 regardless of the accompanying deposit and asset restrictions.
Tulunadu Finance & Developments Ltd. must stop operating as an NBFC and cannot accept fresh deposits. It also cannot sell or otherwise alienate assets without prior RBI approval, affecting customers, creditors, and counterparties dealing with the company.
Published as Tulunadu Finance & Developments Ltd.
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