Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
18 Nov 2005
Case Brief
The Reserve Bank of India, on September 2, 2005, cancelled the certificate of registration of Mukat Finance Limited, whose registered office is in Mumbai, for carrying on the business of a non-banking financial institution. The release states that, following the cancellation, the company cannot transact non-banking financial business. RBI also prohibited the company from acceptance of deposits and from alienating its assets, citing Sections 45-IA(6), 45-MB(1) and 45-MB(2) of the RBI Act, 1934.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration granted to Mukat Finance Limited under Section 45-IA(6) of the RBI Act, 1934. As a consequence, the company cannot transact the business of a non-banking financial institution. RBI also invoked Sections 45-MB(1) and 45-MB(2) to prohibit the company from accepting deposits and from alienating its assets.
Operating Impact
Mukat Finance Limited can no longer operate as a non-banking financial institution and must stop deposit-taking and asset alienation activities. The restrictions directly affect the company and protect counterparties, depositors, and other stakeholders from further regulated business activity by the firm.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 45-MB (1) of the Reserve Bank of India Act, 1934
- Section 45-MB (2) 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
- 2 Sept 2005
- Effective From
- 2 Sept 2005
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC