Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
13 Jan 2003
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration issued to Interact Leasing & Finance Limited, New Delhi, on 14 December 2002 under Section 45 IA of the RBI Act, 1934. The cancellation means the company can no longer carry on the business of a non-banking financial institution. RBI further prohibited the company from accepting deposits under Section 45MB(1) and from alienating assets under Section 45MB(2). The company must still repay public deposits in accordance with the terms of the deposit contracts.
Why RBI Acted
The Reserve Bank of India cancelled, on December 14, 2002, the Certificate of Registration issued to Interact Leasing & Finance Limited under Section 45 IA of the RBI Act, 1934, for carrying on the business of a Non-Banking Financial Institution. As a result, the company cannot transact NBFC business as defined under Section 45 IA. The company was also prohibited under Section 45MB(1) from accepting deposits and under Section 45MB(2) from alienating assets, while remaining obliged to repay public deposits according to the contract terms.
Operating Impact
Interact Leasing & Finance Limited must stop NBFC operations and cannot accept new deposits or dispose of assets as prohibited by RBI. Existing public deposit obligations remain and must be repaid under the original contract terms; depositors are affected by the company’s continued repayment obligation, not by any new acceptance of funds.
Regulatory Basis
- Section 45 IA 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
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 14 Dec 2002
- Effective From
- 14 Dec 2002
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC