The Reserve Bank of India (RBI) announced on Thursday the cancellation of five non-banking financial company (NBFC) registration certificates, while eight other NBFCs surrendered their registrations for various business reasons. According to the central bank's release, these actions reflect regulatory adjustments within the financial sector as companies undergo business restructuring and operational changes. The RBI's decision to cancel these licences indicates that these companies no longer met the regulatory requirements for NBFC operations, with the central bank exercising powers conferred under Section 45-IA (6) of the RBI Act, 1934. As per the latest reports, these cancellations include four companies based in Maharashtra and one from New Delhi, with the RBI noting that these companies are no longer permitted to carry on the business of a non-banking financial institution (NBFI) as defined under the Act.
The RBI cancelled the licences of Dar's Financial Services, Rolta Holding and Finance Corporation, Vasudeo Securities, Parsoli Corporation and A C Choksi Financial Services. As reported by The Economic Times, these cancellations were part of the central bank's ongoing regulatory oversight of the NBFC sector. The RBI's decision to cancel these licences indicates that these companies no longer met the regulatory requirements for NBFC operations, with the central bank noting that these companies are no longer permitted to carry on the business of a non-banking financial institution (NBFI) as defined under the Act. However, the RBI has not provided specific reasons for each cancellation, stating only that "in exercise of powers conferred under Section 45-IA (6) of the RBI Act, 1934, the certificate of registration has been cancelled."
Separately, Anupam Mercantile, Grand Motor and Finance, Sky Limit International Finance and ASA International India Microfinance surrendered their licences after exiting the Non-Banking Financial Institution (NBFI) business. According to the RBI release, these companies voluntarily chose to cease NBFC operations and surrender their registrations. The central bank noted that these surrenders were made after the companies exited the NBFI business sector, with the eight NBFCs that surrendered their CoR having their licences cancelled under the provisions of the RBI Act, 1934. The eight NBFCs that surrendered their registration include six from New Delhi and one each from Assam and West Bengal, demonstrating the widespread nature of these exits across different states.
April Investment and Finance Pvt Ltd and Shivam Securities Pvt Ltd surrendered their licences after ceasing to be legal entities due to amalgamation, merger, dissolution or voluntary strike-off. As reported by The Economic Times, these companies no longer existed as separate legal entities following corporate restructuring activities. The RBI's release indicated that these surrenders were made after the companies ceased to exist as separate legal entities, with the central bank cancelling their CoR consequently. These cases highlight how corporate restructuring activities within the NBFC sector can lead to regulatory changes.
Anagram Industries and CDN Finance surrendered their licences after meeting specific criteria prescribed for unregistered entities. According to the RBI release, Anagram Industries surrendered its licence after qualifying as an unregistered Core Investment Company (CIC) that does not require registration with the RBI. Similarly, CDN Finance surrendered its licence after meeting the criteria prescribed for an unregistered Type I NBFC that does not require registration. These surrenders were made after these companies met the regulatory criteria for specific unregistered NBFC categories. The central bank has also reiterated that holding a registration certificate is subject to continuous compliance, and that any regulatory relief obtained through appellate or judicial processes does not dilute NBFCs' obligation to adhere to the law and regulatory directions in both letter and spirit.
