Recorded RBI impact
License suspension
License suspension · Fresh imposition
Published by RBI
1 Apr 2014
Case Brief
RBI announced a one-year keep-in-abeyance on issuing Certificates of Registration (COR) to companies proposing to conduct business of NBFI under Section 45IA of the RBI Act, 1934. The move was taken in public interest while the regulator reviewed the NBFC framework after recommendations from the Nachiket Mor Committee. Applications received on or before March 31, 2014 were to be processed normally, and the suspension did not apply to certain prospective entities such as CIC-NDSIs, IFCs, IDF-NBFCs and NBFC-MFIs.
Why RBI Acted
In public interest and pending review/streamlining of the NBFC regulatory and supervisory framework, RBI decided to temporarily suspend the issue of Certificate of Registration under Section 45IA of the RBI Act, 1934 to companies proposing to conduct business of NBFI. The suspension was for one year. Applications already received on or before March 31, 2014 were to be processed normally, and the temporary suspension did not apply to prospective systemically important Core Investment Companies (CIC-NDSIs), Infrastructure Finance Companies (IFCs), Infrastructure Debt Fund companies (IDF-NBFCs) and NBFCs proposing to conduct micro-finance business (NBFC-MFIs), which could still be considered in public interest.
Operating Impact
Prospective NBFI applicants could not receive new CORs for one year, limiting fresh entry into the sector. Existing applications filed by March 31, 2014, and specified categories of applicants remained eligible for normal consideration.
Regulatory Basis
- Section 45IA of the RBI Act, 1934
Action Facts
- Primary Impact
- License suspension
- Order Date
- 1 Apr 2014
- Effective From
- 1 Apr 2014
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC