Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
17 May 2005
Case Brief
On April 20, 2005, the Reserve Bank of India cancelled the certificate of registration issued to B. M. Motor Finance Private Limited, House No. 568, Sector 20A, Chandigarh, for carrying on the business of a non-banking financial institution. The cancellation was made under Section 45IA of the Reserve Bank of India Act, 1934. As a result, the company cannot transact the business of a non-banking financial institution, although it remains under an obligation to repay public deposits according to the terms and conditions of the deposit contract.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration issued to B. M. Motor Finance Private Limited, Chandigarh, for carrying on the business of a non-banking financial institution. The action was taken under Section 45IA of the Reserve Bank of India Act, 1934, which empowers RBI to cancel the registration certificate of a non-banking financial company. After cancellation, the company cannot transact NBFC business, but remains obligated to repay public deposits in accordance with the terms and conditions of the deposit contract.
Operating Impact
The company is barred from carrying on NBFC business going forward. Public depositors are still to be repaid under the original deposit contract terms, so the main ongoing obligation is repayment rather than continued operations. The effective date of the cancellation is April 20, 2005.
Regulatory Basis
- Section 45IA of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 20 Apr 2005
- Effective From
- 20 Apr 2005
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC