RBI Cancels Registration of 4 NBFCs; Other 7 Surrender Certificates
Moneylife Digital Team 21 July 2021
The Reserve Bank of India (RBI) has cancelled certificate of registration of four non-banking finance companies, one each from Haryana, Kerala, Telangana, and New Delhi. Separately, the central bank says, seven NBFCs have surrendered their certificate of registration, including Macquarie Finance (India) Pvt Ltd. 
 
Those whose registration has been cancelled by RBI, include Faridabad, Haryana-based Psychotropics Leasing and Finance Pvt Ltd, Pathanamthitta, Kerala-based Saan Popular Finance Pvt Ltd, Hyderabad-based Classic Leafin Pvt Ltd and New Delhi-based Alka Mercantile Pvt Ltd (currently known as Surbhi Mercantile Pvt Ltd).
 
While the central bank has not given any specific reason, in a statement, RBI says, "...in exercise of powers conferred on it under section 45-IA (6) of the RBI Act, 1934, has cancelled the certificate of registration...As such, the above companies shall not transact the business of a non-banking financial institution-NBFI, as defined in clause (a) of Section 45-I of the RBI Act."
 
Section 45-IA (6) of the RBI Act is related with the central bank taking action against NBFCs that cease to carry out business or fail to comply with regulator norms or are prohibited from accepting deposits.
 
Separately, it says, seven NBFCs have surrender their certificate of registration to RBI. This includes, two NBFCs from Mumbai and one each from Hyderabad, Haryana, Bangalore, New Delhi, and Jharkhand. 
 
Mumbai-based Macquarie Finance (India) and Versura Shiksha Service Pvt Ltd have surrendered their registration certificate. RBI has issued an order for cancellation of their registration on 31st May and 30 April 2021.
 
Hyderabad-based VPCL Finance Pvt Ltd's registration certificate is cancelled from 12 April 2021. Gurugram, Haryana-based Bibby Financial Services (India) Pvt Ltd's registration certificate is cancelled on 30 April this year.
 
RBI says, Karnataka State Industrial and Infrastructure Development Corp Ltd also surrendered its registration as NBFC and it had issued an order on 11 May 2021. On the same day, the central bank issued another order for cancelling registration certificate of New Delhi-based Nahata Securities Pvt Ltd.
 
Dhanbad, Jharkhand-based Gapp Project Consultant Pvt Ltd, which was issued a registration in 1998, also decided to surrender its certificate. RBI issued an order for this on 31 May 2021. 
 
In a statement, RBI says, "the...NBFCs have surrendered the certificate of registration granted to them by the RBI. The RBI, in exercise of powers conferred on it under Section 45-IA (6) of the RBI Act, 1934, has therefore cancelled their certificate of registration. As such, the above companies shall not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act."
 
Comments
ragup
3 days ago
Is such mass closing of NBFCs usual? Or, is this the pandemic effect?
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