Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
31 May 2005
Case Brief
On May 10, 2005, the Reserve Bank of India cancelled the certificate of registration granted to KFIC Financial Services Limited, Pune, for carrying on non-banking financial business. As a result, the company cannot transact the business of a non-banking financial institution. RBI also prohibited the company from accepting deposits and from alienating its assets. The action was taken under Section 45IA of the RBI Act, 1934, with the additional prohibitions referenced under Section 45MB(1) and 45MB(2).
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration granted to KFIC Financial Services Limited, Pune, for carrying on the business of a non-banking financial institution. The release states that, following cancellation, the company cannot transact the business of a non-banking financial institution and has also been prohibited from acceptance of deposits and from alienation of assets. The statutory basis cited is Section 45IA of the RBI Act, 1934 for cancellation of the registration certificate, along with Sections 45MB(1) and 45MB(2) for prohibiting acceptance of deposits and alienation of assets.
Operating Impact
KFIC Financial Services Limited loses permission to operate as a non-banking financial company and must stop NBFC कारोबार immediately. It cannot accept deposits or alienate assets, affecting customers and counterparties until the restrictions are otherwise altered by RBI.
Regulatory Basis
- Section 45IA 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
- 10 May 2005
- Effective From
- 10 May 2005
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC