The Reserve Bank has not assigned any reason for the cancellation of licence of these companies.
NBFC Crisis: The RBI Thursday cancelled the registration of twelve non-banking finance companies while five other surrendered their certificate of registration to the sectoral regulator. In exercise of powers conferred under Section 45-IA (6) of the Reserve Bank of India Act, 1934, the certificate of registration of a dozen companies has been cancelled and these companies will not be allowed to take part in the business of non-banking financial institutions, said the bank.
While 9 out of total 12 NBFCs were based in Kolkata, three others were based in national capital Delhi. In the statement, the Reserve Bank did not assign any reason for cancellation of registration of these non-banking finance companies.
India’s shadow banking sector has been grappling with an unprecedented liquidity crisis after a major scam was unearthed in IL&FS late last year. The contagion effect later spread to other established players like DHFL forcing the Union government and Reserve Bank to announce special measures to support the NBFCs and Housing Finance Companies.
Nine Kolkata based NBFCs whose licences have been cancelled are: Padamsagar Enterprises; Abbott Marketing Private Limited; Aakansha Trexim Private Limited; Ambo Credit Private Limited; Rungta Carriers Ltd; Belvedere Commercials Ltd; Padmanabham Overseas Private Limited; Sukhmani Finvest Private Limited (presently known as Sukhmani Finvest Ltd.); and Bimalnath Impex Private Limited.
The Reserve Bank has also barred three Delhi based companies from dealing in the business of non-banking financial institutions. These are Unitech Capital Private Limited (formerly known as Libor Fiscal Pvt. Ltd.); Punam Stock Brokings Private Limited and Magnum Financial Services Private Limited.
“The above companies shall not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act, 1934,” said the Reserve Bank.
Five NBFCs surrender licence
Chennai based Isometric Capital Ventures Private Limited, Hyderabad based Capitalsiri Investments Private Limited, Delhi based Concrete Techno Projects Limited and Kolkata based Aditya Trade & Business Private Limited have surrendered their certificate of registration. In addition to these four companies, Haryana State Industrial and Infrastructure Development Corporation Limited has also surrendered its certificate of registration.
The RBI said the licence granted to these NBFCs by the bank has been cancelled following their decision to surrender their certificate of registration. Now these NBFCs can’t take part in the business activities specified for non-banking financial institutions.