Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
2 Aug 2018
Case Brief
RBI, acting under Section 45-IA(6) of the Reserve Bank of India Act, 1934, cancelled the Certificate of Registration of 36 NBFCs listed in the release. The affected entities include firms based in Punjab, Chandigarh, Himachal Pradesh, Odisha, and Andhra Pradesh. The release further states that these companies shall not transact the business of a Non-Banking Financial Institution under Section 45-I(a) of the RBI Act, 1934.
Why RBI Acted
In exercise of powers under Section 45-IA(6) of the Reserve Bank of India Act, 1934, RBI cancelled the Certificate of Registration (CoR) of 36 named companies. The release states that, as a consequence, these companies shall not transact the business of a Non-Banking Financial Institution as defined in Section 45-I(a) of the RBI Act, 1934.
Operating Impact
All 36 named companies lose their RBI registration and must stop carrying on NBFC business. Customers, borrowers, and counterparties dealing with these entities are impacted because the firms are no longer permitted to operate as non-banking financial institutions. The restriction is immediate as stated by the cancellation dates in the table.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 45-I of the RBI Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Effective From
- 30 May 2018
- Entities Affected
- 36
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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