Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
27 Jun 2019
Case Brief
The Reserve Bank of India cancelled the Certificates of Registration of 23 NBFCs under Section 45-IA(6) of the RBI Act, 1934. The named companies include entities based in New Delhi, Kolkata, Chennai, Faridabad and Ahmedabad. Following cancellation, they are prohibited from carrying on the business of a Non-Banking Financial Institution as defined in the RBI Act.
Why RBI Acted
The Reserve Bank of India exercised its powers under Section 45-IA(6) of the Reserve Bank of India Act, 1934 to cancel the Certificate of Registration of 23 named companies. As a result, these entities are no longer permitted to transact the business of a Non-Banking Financial Institution as defined in Section 45-I(a) of the RBI Act, 1934.
Operating Impact
All 23 affected companies must stop NBFC activities and cannot legally transact non-banking financial business. Counterparties and customers dealing with these firms are impacted because the firms lose their regulatory permission to operate as NBFCs. The order is effective from the stated cancellation dates for each company.
Regulatory Basis
- Section 45-IA (6) of the Reserve Bank of India Act, 1934
- Section 45-I of the RBI Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Effective From
- 10 May 2019
- Entities Affected
- 23
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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