The Reserve Bank of India (RBI) has taken significant actions in the financial sector, canceling the certificate of registration of seven non-banking finance companies (NBFCs) and accepting the surrender permits of 14 NBFCs. These moves aim to regulate and maintain the stability of the non-banking financial institution (NBFI) sector. Here are the details of the RBI’s actions:
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The RBI has canceled the certificate of registration of the following seven NBFCs:
These companies are no longer permitted to carry out the business of a Non-Banking Financial Institution (NBFI). The cancellation orders were issued on various dates in April, with Coorg Tea Company’s cancellation order on April 20 and Genfin Capital Pvt Ltd’s cancellation on April 26.
In addition to the cancellations, the RBI has accepted the surrender permits of 14 NBFCs. The reasons for surrender vary among these companies:
Exit from Business:
These seven companies have surrendered their licenses due to their decision to exit the NBFI business.
Unregistered Core Investment Company (CIC):
These two NBFCs surrendered their licenses as they met the criteria prescribed for unregistered Core Investment Companies (CIC) that do not require registration.
Ceasing to be a Legal Entity:
These five NBFCs surrendered their permits due to ceasing to be a legal entity, which could be a result of amalgamation, merger, dissolution, or voluntary strike-off.
NBFCs are companies registered under the Companies Act, 1956, engaged in various financial activities. These activities may include providing loans and advances, acquiring shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance, and chit fund business. However, NBFCs do not include institutions primarily engaged in agriculture activity, industrial activity, purchase or sale of goods (other than securities), or providing services and sale/purchase/construction of immovable property.
The Reserve Bank of India (RBI) is the central bank of India, responsible for the formulation and implementation of monetary policy in the country. It was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934. The RBI plays a crucial role in maintaining financial stability, regulating the banking system, and ensuring the stability of the Indian rupee.
Here are some key pieces of information about the Reserve Bank of India:
c. Managing foreign exchange reserves and overseeing foreign exchange markets to maintain the stability of the Indian rupee.
d. Promoting the development and stability of financial markets, including money, government securities, and foreign exchange markets.
e. Act as a banker to the government by managing the government’s accounts, issuing and managing government securities, and providing banking services to the government.
f. Conducting research and analysis on various aspects of the economy, including economic indicators, financial markets, and banking sector trends.
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