Action on Ajanta Commerce
Case Brief
The Reserve Bank of India cancelled the Certificate of Registration of 31 NBFCs under Section 45-IA(6) of the RBI Act, 1934. The order lists the affected companies and their cancellation dates. Following the cancellation, the companies are prohibited from transacting the business of a Non-Banking Financial Institution under the RBI Act.
The Reserve Bank of India exercised powers under Section 45-IA(6) of the RBI Act, 1934 to cancel the Certificate of Registration (CoR) of 31 named companies. The release states that, as a result, these companies shall not transact the business of a Non-Banking Financial Institution as defined under Section 45-I(a) of the RBI Act, 1934.
Severity Assessment
Cancellation of the CoR is a licence/certificate cancellation, which is a severity 5 action regardless of any other considerations.
All 31 named companies must stop carrying on NBFC business. Customers, counterparties, and other stakeholders can no longer rely on these firms to operate as registered non-banking financial institutions, and any such activity after cancellation would be unauthorized.
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