Action on Lotus Hire Purchase
Case Brief
On January 15, 2008, the Reserve Bank of India cancelled the Certificate of Registration granted to M/s. Lotus Hire Purchase Limited, Jalandhar City, Punjab. The cancellation was issued under Section 45-IA(6) of the RBI Act, 1934. After the cancellation, the firm is barred from transacting the business of a non-banking financial institution.
The Reserve Bank of India cancelled the certificate of registration granted to M/s. Lotus Hire Purchase Limited, whose registered office was in Jalandhar City, Punjab. The action was taken in exercise of powers under Section 45-IA(6) of the Reserve Bank of India Act, 1934. Following the cancellation, the company cannot carry on the business of a non-banking financial institution as defined under Section 45-I(a) of the Act.
Severity Assessment
Cancellation of an NBFC's certificate of registration is a severity-5 licensing action because it prevents the entity from carrying on the regulated business at all.
M/s. Lotus Hire Purchase Limited must stop NBFC operations and cannot legally transact non-banking financial institution business going forward. The restriction directly affects the company’s regulated business activity and its customers/counterparties relying on NBFC services.
Published as M/s. Lotus Hire Purchase Limited
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