RBI Cancels Registration Of 12 NBFCs

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RBI Cancels Registration Of 12 NBFCs
Rajat Mishra - 29 August 2019

The Reserve Bank of India (RBI) today cancelled the certificate of registration of 12 Non-Banking Financial Companies (NBFCs) through a separate notification for unspecified reasons. Out of the 12 NBFCs, nine are from Kolkata and three are from Delhi. The RBI has cancelled the certificates as per the Section 45-IA (6) of the Reserve Bank of India Act, 1934.

The move has impacted companies such as Padamsagar Enterprises, Abbott Marketing, Aakansha Trexim, Ambo Credit, Rungta Carriers from Kolkata and Padmanabham Overseas, Unitech Capital, Punam Stock Brokings from Delhi.

Also, five NBFCs surrendered their certificate of registration to the RBI. NBFCs who have surrendered their certificate of registrations are Isometric Capital Ventures, Capitalsiri Investments Private, Concrete Techno, Haryana State Industrial and Infrastructure Development Corporation, Aditya Trade & Business.

The above companies will not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act, 1934. The certificate of registration to some of the companies was granted as early as 1998 and to two of them the certificate of registration was granted in 2016 and 2018.

The NBFC sector plays a critical role in the economy. The cancellation of NBFCs’ registration by banking regulator comes at a time when the sector is already facing liquidity crunch and many steps have been taken by the government to take them out of the gloom so that their business kick-starts, thereby boosting consumption in the economy.

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