Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
4 Feb 2002
Case Brief
The Reserve Bank of India, acting under Section 45-IA(6) of the RBI Act, 1934, cancelled the certificate of registration of Tulunadu Finance & Developments Ltd. with effect from January 31, 2002. The company, based in Udupi, can no longer transact NBFC business as defined under the Act. RBI also imposed additional restrictions under Section 45MB(1) and 45MB(2), barring acceptance of deposits and alienation of assets without prior permission from the Reserve Bank.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration of Tulunadu Finance & Developments Ltd. under Section 45-IA(6) of the RBI Act, 1934. As a consequence, the company cannot carry on the business of a non-banking financial institution as defined in Section 45-IA(a). RBI further prohibited the company from accepting deposits under Section 45MB(1) and from alienating its assets under Section 45MB(2) without prior permission of the Reserve Bank.
Operating Impact
Tulunadu Finance & Developments Ltd. must stop operating as an NBFC and cannot accept fresh deposits. It also cannot sell or otherwise alienate assets without prior RBI approval, affecting customers, creditors, and counterparties dealing with the company.
Regulatory Basis
- Section 45 IA(6) of the Reserve Bank of India Act, 1934
- Section 45IA of the Reserve Bank of India Act, 1934
- Section 45MB(1)
- Section 45MB(2)
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 31 Jan 2002
- Effective From
- 31 Jan 2002
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC