Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
2 Nov 2007
Case Brief
The Reserve Bank of India cancelled the certificates of registration of 12 named companies under Section 45-IA(6) of the RBI Act, 1934 because they had opted to exit the business of a non-banking financial institution. The companies are no longer permitted to transact NBFC business, but must continue to repay any deposits, if any, as per the terms and conditions of the deposit contracts.
Why RBI Acted
RBI cancelled the certificate of registration granted to 12 companies under Section 45-IA(6) of the RBI Act, 1934 because they had opted to exit from the business of a non-banking financial institution. After cancellation, the companies cannot transact the business of a non-banking financial institution, though they remain obligated to repay any deposits in accordance with the terms and conditions of the deposit contracts.
Operating Impact
The 12 companies can no longer carry on non-banking financial institution business. Any deposit liabilities, if present, still have to be repaid according to contract terms, and affected customers/depositors remain entitled to repayment as applicable.
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
- Entities Affected
- 12
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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