Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
12 May 2005
Case Brief
On April 8, 2005, the Reserve Bank of India cancelled the Certificate of Registration issued to Forward Securities Limited, Mumbai, 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. Following the cancellation, the company cannot transact NBFC business, although it must still repay public deposits as per the terms and conditions of the deposit contracts.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration issued to Forward Securities Limited on April 8, 2005. The cancellation was issued 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. As a result, the company can no longer carry on the business of a non-banking financial institution, though it remains obligated to repay public deposits in accordance with the contract terms.
Operating Impact
Forward Securities Limited is barred from conducting non-banking financial institution business going forward. The company must continue to honor and repay public deposits according to the contract terms, and the restriction directly affects its ability to operate as an NBFC.
Regulatory Basis
- Section 45IA of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 8 Apr 2005
- Effective From
- 8 Apr 2005
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC