Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
23 Dec 2003
Case Brief
On December 12, 2003, the Reserve Bank of India cancelled the certificate of registration issued to Hindustan Auto Finance Limited, New Delhi, for carrying on the business of a non-banking financial institution. The cancellation was issued under Section 45IA(6) of the RBI Act, 1934. As a result, the company cannot continue NBFC business. RBI also prohibited it from accepting deposits and from alienating its assets under Section 45MB(1) and 45MB(2). The company must still repay public deposits according to the terms of the deposit contracts.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration issued to Hindustan Auto Finance Limited under Section 45IA(6) of the RBI Act, 1934, for carrying on the business of a non-banking financial institution. Following the cancellation, the company cannot transact NBFC business. RBI also prohibited the company from accepting deposits and from alienating its assets under Section 45MB(1) and 45MB(2), while noting that the company remains obliged to repay public deposits as per the terms of the deposit contract.
Operating Impact
Hindustan Auto Finance Limited must stop operating as a non-banking financial institution and cannot accept fresh deposits or sell/transfer assets. Public depositors remain owed repayment under the terms of their contracts, and the restriction is immediate from the cancellation date.
Regulatory Basis
- Section 45IA(6) of the Reserve Bank of India Act, 1934
- Section 45MB (1) of the Reserve Bank of India Act, 1934
- Section 45MB (2) of the Reserve Bank of India Act, 1934
- clause (a) of Section 45IA of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 12 Dec 2003
- Effective From
- 12 Dec 2003
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC