Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
26 May 2004
Case Brief
The Reserve Bank of India cancelled the certificate of registration of CFL Capital Financial Services Ltd., Kolkata, on May 18, 2004 under Section 45IA of the RBI Act, 1934. Following the cancellation, the company cannot transact the business of a non-banking financial institution. RBI further prohibited the company from accepting deposits and from alienating its assets under Section 45MB. The company remains obligated to repay public deposits according to the terms of the deposit contracts.
Why RBI Acted
On May 18, 2004, RBI cancelled the certificate of registration granted to CFL Capital Financial Services Ltd., Kolkata, under Section 45IA of the RBI Act, 1934. As a result, the company cannot carry on the business of a non-banking financial institution. RBI also invoked Section 45MB(1) and 45MB(2) to prohibit the company from accepting deposits and from alienating its assets, while requiring repayment of public deposits as per the deposit contract terms.
Operating Impact
The company must stop NBFC business activities and comply with the prohibition on accepting deposits and alienating assets. It must still repay public deposits as contractually due, affecting depositors and creditors.
Regulatory Basis
- Section 45IA of the Reserve Bank of India Act, 1934
- Section 45MB (1) of this Act
- Section 45MB (2) of this Act
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 18 May 2004
- Effective From
- 18 May 2004
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC