Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
13 Jun 2002
Case Brief
The Reserve Bank of India exercised its powers under Section 45-IA(6) of the RBI Act, 1934 to cancel the Certificate of Registration granted to Maha Rashtra Apex Corporation Limited, effective June 13, 2002. Following the cancellation, the company cannot carry on business as a non-banking financial institution. RBI also imposed prohibitions on acceptance of deposits under Section 45MB(1) and on alienation of assets under Section 45MB(2), unless prior permission is obtained from the Reserve Bank.
Why RBI Acted
The Reserve Bank of India cancelled the Certificate of Registration granted to Maha Rashtra Apex Corporation Limited under Section 45-IA(6) of the RBI Act, 1934. As a result, the company cannot transact the business of a non-banking financial institution as defined under Section 45-I(a). The release also states that the company is prohibited from accepting deposits under Section 45MB(1) and from alienating assets under Section 45MB(2) without prior permission of the Reserve Bank.
Operating Impact
Maha Rashtra Apex Corporation Limited must stop operating as an NBFC and cannot accept fresh deposits. It also cannot alienate assets without prior RBI permission, limiting any disposal or restructuring of its asset base. The action affects the company directly and protects depositors and counterparties from further regulated financial activity by the entity.
Regulatory Basis
- Section 45 IA (6) of the Reserve Bank of India Act, 1934
- Clause (a) of Section 45 I of the Act
- Section 45MB(1)
- Section 45 MB(2)
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 13 Jun 2002
- Effective From
- 13 Jun 2002
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC