Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
25 Nov 2008
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration of KGK Finance Limited, an NBFC with its registered office in Chennai, on 29 October 2008. The action was taken under Section 45-IA(6) of the RBI Act, 1934. As a result, KGK Finance Limited cannot transact the business of a non-banking financial institution.
Why RBI Acted
The Reserve Bank of India cancelled the Certificate of Registration issued to KGK Finance Limited, whose registered office was in West Mambalam, Chennai, under Section 45-IA(6) of the Reserve Bank of India Act, 1934. The release states that the company had been registered to carry on the business of a non-banking financial institution and, following cancellation, it cannot transact that business.
Operating Impact
KGK Finance Limited is barred from carrying on NBFC activities after the cancellation. The restriction directly affects the company’s ability to operate its business, while customers and counterparties can no longer treat it as authorised to conduct non-banking financial institution business.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- clause (a) of Section 45-I of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 29 Oct 2008
- Effective From
- 29 Oct 2008
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC