Press Information Bureau

Government of India

Ministry of Finance

25-November-2016 17:12 IST

Reserve Bank of India has informed that they have cancelled the registration of 44 non-banking financial companies on supervisory concerns and 71 on voluntary grounds during the current year (from April 1, to November 18, 2016). NBFC registered with RBI surrender their Certificate of Registration (CoR) voluntarily if the NBFC desires to undertake non-financial business or mergers with another financial company to undertake NBFI business as provided under RBI Act, 1934 or with a non-financial company to undertake a different line of business. RBI cancels the CoR on supervisory grounds, only if the registered NBFC fails to adhere to the terms and conditions under which the CoR is issued despite providing the NBFC adequate opportunity to rectify the deficiency. This measure is taken to ensure that all NBFCs registered with RBI function in a healthy manner contributing to the growth of the sector but within the regulations framed by RBI for the sector. The cancellation of CoR of such delinquent NBFCs is to make the sector strong and complaint with the regulations.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

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DSM/KA

Cancellation and surrender of NBFC registration: registrations removed for supervisory non-compliance and voluntary surrender to preserve regulatory compliance Termination of an NBFC's Certificate of Registration occurs either by voluntary surrender-when the entity opts to undertake non financial business or merge to pursue non financial activities-or by regulatory cancellation for failure to adhere to CoR terms. Cancellation is imposed only after the NBFC has been given adequate opportunity to remedy deficiencies. These measures ensure that registered NBFCs operate within the licensing conditions and contribute to sectoral stability and compliance.