RBI Cancels Licences of 5 NBFCs, 8 Surrender Registrations

The Reserve Bank of India (RBI) has initiated regulatory measures with respect to 13 non-banking financial companies (NBFCs). The RBI has revoked the certificate of registration of five NBFCs, whereas another eight NBFCs have surrendered their registration. The reasons provided for such actions include business exit, merger, dissolution, voluntary strike-off, and change in regulatory status. Two other NBFCs have surrendered their certificates of registration in accordance with the criteria under which certain entities do not require NBFC registration.

Cancellation of Certificates of Registration of Five NBFCs

The certificates of registration of the following five NBFCs have been cancelled by the RBI,

1. Dar’s Financial Services
2. Rolta Holding and Finance Corporation
3. Vasudeo Securities
4. Parsoli Corporation
5. A C Choksi Financial Services

The above cancellation renders these companies unauthorized to carry out operations as NBFCs.

Registration of Another Eight NBFCs Revoked

Registration of another eight NBFCs was voluntarily surrendered. Four of these companies decided to leave the business of Non-Banking Financial Institutions (NBFI).

They are Anupam Mercantile, Grand Motor and Finance, Sky Limit International Finance and ASA International India Microfinance.

However, the RBI has received registration surrenders from Shivam Securities Pvt Ltd and April Investment and Finance Pvt Ltd because these two companies had ceased to exist legally due to either amalgamation, merger, dissolution or voluntary strike-off.

Why Anagram Industries and CDN Finance Surrendered Registration?

According to the RBI, Anagram Industries surrendered its registration after meeting the required conditions of an unregistered CIC which does not need NBFC registration.

Similarly, CDN Finance surrendered its registration after meeting the conditions of unregistered Type I NBFC where registration is not needed.

What Is the Meaning Behind RBI’s Move?

This particular move has come on account of various changes in the status of regulation of individual NBFCs, rather than a one-time industry-wide decision. This may be due to various factors, including exit from the financial sector, reorganization, and fulfillment of certain conditions which would make the registration of the NBFC unnecessary.

Registration is of great importance to the financial industry, since NBFCs have to operate within a defined regulatory environment.