Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
24 Feb 2022
Case Brief
RBI cancelled the Certificate of Registration of M/s P C Financial Services Private Limited, New Delhi, under Section 45-IA(6)(iv) of the RBI Act, 1934. The company was primarily engaged in mobile app-based lending through Cashbean. RBI cited gross violations of directions on outsourcing and Know Your Customer norms, opaque charging of usurious interest and other charges, and unauthorized use of RBI and CBI logos during recovery efforts, all in breach of the Fair Practices Code.
Why RBI Acted
Under Section 45-IA(6)(iv) of the RBI Act, 1934, RBI cancelled the Certificate of Registration of M/s P C Financial Services Private Limited, New Delhi. The company, which operated mobile app-based lending through 'Cashbean', was found to have grossly violated RBI directions on outsourcing and Know Your Customer norms. RBI also noted that it charged usurious interest rates and other charges in an opaque manner, and unlawfully used the logos of the Reserve Bank of India and the Central Bureau of Investigation for borrower recovery, in gross violation of the Fair Practices Code.
Operating Impact
The company can no longer transact business as a non-banking financial institution. This effectively stops its regulated lending operations and removes its ability to originate or continue NBFC business, affecting borrowers and counterparties linked to its app-based lending activity.
Regulatory Basis
- Section 45-IA (6) (iv) of the Reserve Bank of India Act, 1934
- Section 45-I of the RBI Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC