Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
7 Jun 2013
Case Brief
The Reserve Bank of India cancelled the Certificates of Registration of eight companies that were carrying on non-banking financial institution business. The cancellation was stated to be on supervisory grounds and was exercised under Section 45-IA(6) of the RBI Act, 1934. As a result, the affected companies are no longer permitted to transact the business of a non-banking financial institution.
Why RBI Acted
The Reserve Bank of India cancelled the Certificates of Registration granted to eight companies carrying on the business of a non-banking financial institution, citing supervisory grounds. The notice states that under Section 45-IA(6) of the RBI Act, 1934, RBI may cancel the registration certificate of an NBFC, and that the business of a non-banking financial institution is defined in Section 45-I(a).
Operating Impact
The eight NBFCs named in the release must stop carrying on non-banking financial institution business. The cancellation affects their ability to operate in their regulated NBFC capacity and removes their authority to transact such business going forward.
Regulatory Basis
- Section 45-IA (6) 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
- Effective From
- 3 Apr 2013
- Entities Affected
- 8
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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