The Reserve Bank of India has cancelled the certificate of registration (COR) of 56 non-banking finance companies (NBFCs).
- These companies cannot transact in the business of an NBFC as laid down under the Reserve Bank of India Act, 1934.
Companies included in cancellation list
- Bajaj Finance is already an NBFC and Bajaj Finserve is a core investment company.
- ABNL Investment share in Aditya Birla Nuvo’s net profit was at 0.17 per cent.
- Future Ventures India has now transformed into Future Consumer Enterprise, a sourcing-to-supermarket food company of the Future Group.
Apart from above, companies like Compact Lease Financing, Vapi Investments, Shree Holdings, Neelkanth Fintrade included in the bar list from conducting business.
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 that provide banking services but do not hold a banking license. These institutions are not allowed to take deposits from the public.
- In a bid to bring NBFC norms in line with banks, RBI had unleashed tighter rules in Nov 2014 for NBFCs that will require higher minimum capital & have less time to declare bad loans and proper criteria for appointment of directors.
- Minimum net owned fund required by NBFC – Rs 200 lakh
According to Section 45I-A of the RBI Act, the central bank may cancel a certificate of registration granted to an NBFC if it ceases to carry on the business of an NBFC or fails to comply with any condition subject to which the certificate of registration had been issued to it.