RBI cancels Certificate of Registration of two NBFCs

Case Brief

In this release, the RBI exercised its powers under Section 45-IA(6) of the RBI Act, 1934 to cancel the Certificates of Registration of two NBFCs: Grihastha Finance Limited and Pawan Motor and General Finance Private Limited. The cancellation means the companies are barred from transacting the business of a Non-Banking Financial Institution as defined in the RBI Act.

Action Snapshot

Primary Impact: License cancellation
Entity Type: NBFC
Location: Samastipur, Bihar
Order Date

10 Oct 2022

Effective From

10 Oct 2022

Entities Affected

2

Why RBI Acted

Licensing breach

The RBI cancelled the Certificate of Registration of Grihastha Finance Limited and Pawan Motor and General Finance Private Limited under Section 45-IA(6) of the Reserve Bank of India Act, 1934. As a result, the companies are no longer permitted to transact the business of a Non-Banking Financial Institution as defined under the Act.

Severity Assessment

Cancellation of a Certificate of Registration is a full licence cancellation, which is severity 5.

Impact

The two companies must stop carrying on NBFC business. Borrowers, counterparties, and other stakeholders should treat the entities as no longer authorised to operate as non-banking financial institutions.

Regulatory Basis

Section 45-IA (6) of the Reserve Bank of India Act, 1934
clause (a) of Section 45-I of the RBI Act, 1934

Restrictions & Effective Timeline

Effective From: 10 Oct 2022

Affected Entities

Grihastha Finance Limited
Published as Grihastha Finance Limited
NBFC · Primary
Pawan Motor and General Finance Private Limited
Published as Pawan Motor and General Finance Private Limited
NBFC · Bulk Member