Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
19 May 2020
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration of fourteen companies under Section 45-IA(6) of the RBI Act, 1934. The release lists the affected NBFCs and their cancellation dates, and states that they shall not transact the business of a Non-Banking Financial Institution as defined in Section 45-I(a) of the Act.
Why RBI Acted
The Reserve Bank of India exercised powers under Section 45-IA(6) of the RBI Act, 1934 to cancel the Certificate of Registration of 14 companies. The release does not describe misconduct for each company; it simply states that their CoRs were cancelled and that they shall not transact the business of a Non-Banking Financial Institution as defined in Section 45-I(a) of the RBI Act, 1934.
Operating Impact
The 14 companies are prohibited from conducting NBFC business going forward. Customers, counterparties, and lenders dealing with these firms should treat the entities as no longer authorized to operate as non-banking financial institutions.
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
- 27 Apr 2020
- Entities Affected
- 14
- Entity Role
- Bulk Member
- Entity Type
- NBFC
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