Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
12 Nov 2018
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration of 30 NBFCs under Section 45-IA(6) of the RBI Act, 1934. The named entities span multiple companies, many based in Kolkata and one in Lucknow, and the release makes clear that they are no longer permitted to transact the business of a Non-Banking Financial Institution under Section 45-I(a) of the Act.
Why RBI Acted
In exercise of powers under Section 45-IA(6) of the Reserve Bank of India Act, 1934, RBI cancelled the Certificate of Registration (CoR) of 30 listed companies. The release states that, as a consequence, these companies shall not transact the business of a Non-Banking Financial Institution as defined in Section 45-I(a) of the RBI Act, 1934.
Operating Impact
All 30 affected companies lose their regulatory permission to operate as NBFCs and must stop carrying on NBFC business. Customers, counterparties, and other stakeholders dealing with these firms are impacted because the entities cannot legally continue NBFC operations after the cancellation date stated for each company.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 45-I of the RBI Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Entities Affected
- 30
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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