Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
22 Jul 2005
Case Brief
On June 25, 2005, the Reserve Bank of India cancelled the certificate of registration of Rose Securities Ltd., Kolkatta, for carrying on the business of a non-banking financial institution. As a result, the company can no longer transact NBFC business. RBI also prohibited the company from accepting deposits and from alienating its assets, while noting that public deposits must still be repaid as per the contractual terms. The action was taken under Section 45-IA of the RBI Act, 1934, and the related prohibitions under Section 45-MB.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration granted to Rose Securities Ltd. under Section 45-IA of the RBI Act, 1934. Following cancellation, the company cannot transact the business of a non-banking financial institution. RBI also invoked Section 45-MB(1) to prohibit acceptance of deposits and Section 45-MB(2) to prohibit alienation of assets. The release states the company must still repay public deposits according to the terms and conditions of the deposit contract.
Operating Impact
Rose Securities Ltd. must stop NBFC operations and comply with the prohibitions on accepting deposits and transferring assets. It remains obligated to repay existing public deposits under the terms of the deposit contracts, affecting depositors and any counterparties dealing with its assets.
Regulatory Basis
- Section 45-IA of the Reserve Bank of India Act, 1934
- Section 45-MB (1)
- Section 45-MB (2)
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 25 Jun 2005
- Effective From
- 25 Jun 2005
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC