Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
11 Apr 2022
Case Brief
In this press release, RBI cancelled the Certificate of Registration of 22 NBFCs after they surrendered their registrations, invoking Section 45-IA(6) of the RBI Act, 1934. The release separately notes that Essel Finance Home Loans Limited, a housing finance company, surrendered its CoR granted by the National Housing Bank, and RBI cancelled it under Section 29A(6) of the National Housing Bank Act, 1987. As a result, the named companies are no longer permitted to carry on NBFC business; the HFC is also barred from carrying on housing finance business.
Why RBI Acted
The RBI states that 22 NBFCs surrendered their Certificate of Registration granted by RBI, and accordingly RBI cancelled their CoR under Section 45-IA(6) of the RBI Act, 1934. Separately, one Housing Finance Company, Essel Finance Home Loans Limited, surrendered its CoR granted by NHB, and the CoR was cancelled under Section 29A(6) of the National Housing Bank Act, 1987. The press release further states that the listed companies shall not transact the business of a Non-Banking Financial Institution; for the HFC, it shall neither transact the business of a Housing Finance Institution nor of a Non-Banking Financial Institution.
Operating Impact
The listed entities must stop operating as NBFCs/HFCs and cannot transact the regulated business covered by their cancelled registrations. This affects all named companies and, for the housing finance company, both housing finance and NBFC activities are prohibited going forward.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 29A (6) of the National Housing Bank Act, 1987
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 12 Jan 2022
- Entities Affected
- 23
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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