Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
17 Sept 2004
Case Brief
The Reserve Bank of India cancelled the certificate of registration of Sehajpal Finance & Investment Limited, whose registered office is at Nawanshar Doaba, Punjab, on September 7, 2004. The cancellation was made under Section 45IA of the RBI Act, 1934, and means the company can no longer carry on the business of a non-banking financial institution. RBI also prohibited the company from accepting deposits and from alienating its assets under Section 45MB. The company must, however, continue to repay public deposits in accordance with the terms of the deposit contract, if any.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration granted to Sehajpal Finance & Investment Limited under Section 45IA of the RBI Act, 1934, for carrying on the business of a non-banking financial institution. Consequent to the cancellation, the company cannot transact NBFC business and has been prohibited under Section 45MB(1) from accepting deposits and under Section 45MB(2) from alienating its assets. The release also notes that the company remains obligated to repay public deposits in accordance with the terms of the deposit contract, if any.
Operating Impact
Sehajpal Finance & Investment Limited can no longer operate as an NBFC and cannot accept new deposits or dispose of assets. Existing public deposit obligations, if any, still have to be repaid as per contract terms, affecting depositors and counterparties.
Regulatory Basis
- Section 45IA of the Reserve Bank of India Act, 1934
- Section 45MB (1)
- Section 45MB (2)
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 7 Sept 2004
- Effective From
- 7 Sept 2004
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC