Business Desk – RBI NBFC Action: Reserve Bank of India i.e. RBI has taken a big decision regarding NBFC. The central bank has canceled the Certificate of Registration (CoR) of five non-banking financial companies i.e. NBFCs.
At the same time, eight other NBFCs have returned their registration certificates to RBI due to various reasons. The companies whose registration has been canceled after the RBI action will not be able to do business as NBFCs.
The five companies whose registration has been canceled by the RBI include Dars Financial Services, Rolta Holding and Finance Corporation, Vasudev Securities, Parsoli Corporation and AC Choksi Financial Services.
RBI regulates the NBFC sector and Certificate of Registration is necessary for NBFC business. Under RBI rules, NBFCs have to follow the prescribed regulatory conditions.
RBI registration of 5 NBFCs canceled
RBI has canceled the Certificate of Registration of five companies. These include Dars Financial Services, Rolta Holding and Finance Corporation, Vasudev Securities, Parsoli Corporation and AC Choksi Financial Services.
After cancellation of registration, these companies are not allowed to do business as Non-Banking Financial Institution as NBFC under the RBI Act. RBI has earlier also been canceling the Certificate of Registration of NBFC under Section 45-IA in different cases.
4 companies closed their business and returned their licenses
Four out of eight companies have closed the business of NBFI i.e. Non-Banking Financial Institution. After this these companies returned their registration certificates to RBI. These include Anupam Mercantile, Grand Motor & Finance, Sky Limit International Finance and ASA International India Microfinance.
Thus, in the case of these four companies, instead of canceling the registration by RBI, the Certificate of Registration has been returned after the companies closed the business.
Legal existence of 2 companies ended
Shivam Securities Private Limited and April Investment and Finance Private Limited have also returned their Certificate of Registration. According to RBI, both the companies had ceased to exist as legal companies.
The reason for termination of legal existence of a company may be merger, dissolution of the company or voluntary removal of the name of the company from the register. In such a situation, there is no need to maintain registration as NBFC.
Anagram Industries does not need NBFC registration
Anagram Industries has returned its NBFC registration certificate after fulfilling the prescribed criteria. The company had fulfilled the conditions prescribed for Core Investment Company i.e. CIC without registration.
Such CICs that fulfill the criteria prescribed under RBI rules are not required to register separately as NBFCs. Therefore the company returned its Certificate of Registration.
CDN Finance also returned the license
CDN Finance has also returned its registration certificate to RBI. The company had fulfilled the criteria prescribed for unregistered Type I NBFC. NBFCs fulfilling these conditions are not required to maintain a Certificate of Registration from RBI under prescribed circumstances.
What does RBI's action mean?
NBFC means such financial companies which are not banks, but can do business related to lending, investment and other financial activities. The regulatory framework of RBI is applicable for these. Companies are entered in the official NBFC list of RBI based on their activities and regulatory classification.
In the action taken on September 17, RBI canceled the registrations of 5 companies, while 8 companies themselves returned their Certificates of Registration due to various reasons. Therefore, it would not be correct to consider both types of actions the same.
