Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
23 Jul 2005
Case Brief
On July 5, 2005, the Reserve Bank of India cancelled the certificate of registration of Pontiac Leasing Ltd., Kolkata, which had been granted for carrying on non-banking financial institution business. The order means the company cannot transact NBFC business anymore. RBI also prohibited it from accepting deposits and from alienating assets, while requiring it to continue repaying public deposits as per the deposit contract terms. The action was taken under Section 45-IA of the RBI Act, 1934, and the deposit/asset restrictions under Section 45-MB.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration granted to Pontiac Leasing Ltd. under Section 45-IA of the RBI Act, 1934, for carrying on the business of a non-banking financial institution. Following the cancellation, the company cannot transact NBFC business. RBI also prohibited the company from accepting deposits and from alienating its assets under Section 45-MB(1) and 45-MB(2). The company remains obligated to repay public deposits according to the terms and conditions of the deposit contracts.
Operating Impact
Pontiac Leasing Ltd. must stop carrying on NBFC business and cannot accept fresh deposits or transfer/encumber assets. It remains liable to repay existing public deposits in accordance with the contractual terms, and depositors are affected only to the extent of repayment under those terms. Effective from July 5, 2005.
Regulatory Basis
- Section 45-IA of the Reserve Bank of India Act, 1934
- Section 45-MB (1) of this Act
- Section 45-MB (2)
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 5 Jul 2005
- Effective From
- 5 Jul 2005
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC