Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
18 Jul 2017
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration of eight NBFCs under Section 45-IA(6) of the RBI Act, 1934. The affected entities are listed individually in the release, and the cancellation order dates range from January 23, 2017 to May 22, 2017. As a result, these companies cannot transact the business of a non-banking financial institution as defined under the RBI Act.
Why RBI Acted
The RBI cancelled the Certificate of Registration of eight non-banking financial companies in exercise of its powers under Section 45-IA(6) of the Reserve Bank of India Act, 1934. The release does not specify the underlying factual breach for the cancellations, only the statutory basis and the list of affected companies.
Operating Impact
The eight NBFCs can no longer carry on non-banking financial institution business. This is a complete regulatory shutdown of their NBFC activity, affecting their ability to conduct lending/financing operations as regulated entities and informing counterparties and customers that the firms may not operate in that licensed capacity.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 45-I of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 23 Jan 2017
- Entities Affected
- 8
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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