Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
27 Apr 2004
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration granted to UP Instalments Limited, Bareilly, on March 18, 2004. The order was issued under Section 45IA of the RBI Act, 1934 for carrying on the business of a non-banking financial institution. As a consequence, the company cannot carry on NBFC business. RBI also prohibited the company from accepting deposits and from alienating its assets under Section 45MB, while noting that it must still repay public deposits according to the terms of the deposit contract, if any.
Why RBI Acted
RBI cancelled the Certificate of Registration granted to UP Instalments Limited under Section 45IA of the RBI Act, 1934 for carrying on the business of a non-banking financial institution. Following the cancellation, the company cannot transact NBFC business. RBI also stated that, under Section 45MB(1) and 45MB(2), the company is prohibited from accepting deposits and from alienating its assets, while remaining obligated to repay public deposits in accordance with deposit contract terms, if any.
Operating Impact
UP Instalments Limited can no longer operate as a non-banking financial institution and is barred from accepting fresh deposits or disposing of assets. Public depositors remain protected to the extent of the company’s contractual repayment obligations, and the restriction takes effect from the cancellation date.
Regulatory Basis
- Section 45IA of the Reserve Bank of India Act, 1934
- Section 45MB (1) of this Act
- Section 45MB (2) of this Act
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 18 Mar 2004
- Effective From
- 18 Mar 2004
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC