Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
9 Jun 2022
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration of Malik Motor Finance Limited under Section 45-IA(6) of the RBI Act, 1934. In the same release, RBI also cancelled the CoR of North East Region Housing Finance Company Limited and Aryarth Housing Finance Limited under Section 29A(6) of the National Housing Bank Act, 1987. The release does not specify the factual reasons behind the cancellations, but it makes clear that the entities may no longer transact business as a non-banking financial institution or, in the case of the housing finance companies, as a housing finance institution or NBFC. This is a complete withdrawal of authorization to operate in those regulated businesses.
Why RBI Acted
Under Section 45-IA(6) of the RBI Act, 1934, RBI cancelled the CoR of Malik Motor Finance Limited. The release does not specify the underlying misconduct or breach, but states that the company shall not transact the business of a Non-Banking Financial Institution as defined in Section 45-I(a) of the RBI Act, 1934. The same press release also cancels the CoR of two housing finance companies under Section 29A(6) of the National Housing Bank Act, 1987.
Operating Impact
Malik Motor Finance Limited can no longer operate as an NBFC, and the two housing finance companies can no longer carry on housing finance or NBFC business. The restrictions take effect from the respective cancellation orders dated May 26, 2022, May 27, 2022, and May 30, 2022, and affect the entities directly; customers and counterparties must treat them as unauthorized for new regulated business.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 29A (6) of the National Housing Bank Act, 1987
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 26 May 2022
- Effective From
- 26 May 2022
- Entities Affected
- 3
- Entity Role
- Bulk Member
- Entity Type
- NBFC
Related Entities
Entities similar to Aryarth Housing Finance Limited