RBI cancels Certificate of Registration of two NBFCs

Case Brief

The RBI cancelled the Certificate of Registration of two NBFCs under Section 45-IA(6) of the RBI Act, 1934. The affected entities are Nedumpillil Financial Company Limited and Bhagwan Hire Purchase Limited. With the cancellation, both companies are barred from transacting business as Non-Banking Financial Institutions under the RBI Act.

Action Snapshot

Primary Impact: License cancellation
Entity Type: NBFC
Location: Kochi, Kerala
Order Date

Unknown date

Effective From

17 Nov 2022

Entities Affected

2

Why RBI Acted

Licensing breach

The Reserve Bank of India cancelled the Certificate of Registration (CoR) of Nedumpillil Financial Company Limited and Bhagwan Hire Purchase Limited under Section 45-IA(6) of the RBI Act, 1934. Following cancellation, the companies shall not transact the business of a Non-Banking Financial Institution as defined in Section 45-I(a) of the RBI Act.

Severity Assessment

Cancellation of the Certificate of Registration is a full license cancellation, which carries severity 5 under the rubric.

Impact

Both companies must stop carrying on non-banking financial business. The cancellation affects the entities directly and removes their ability to operate as NBFCs going forward.

Regulatory Basis

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

Restrictions & Effective Timeline

Effective From: 17 Nov 2022

Affected Entities

Bhagwan Hire Purchase Limited
Published as Bhagwan Hire Purchase Limited
NBFC · Bulk Member
Nedumpillil Financial Company Limited
Published as Nedumpillil Financial Company Limited
NBFC · Primary