RBI cancels Certificate of Registration of these NBFCs; Check Details

The Reserve Bank of India (RBI) has cancelled the Certificate of Registration of Two NBFCs in exercise of powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934.

These NBFCs are Grihastha Finance Limited and Pawan Motor and General Finance Private Limited.

In terms of Section 45-IA of the RBI Act, 1934 it is mandatory for a company to obtain Certificate of Registration (CoR) from Reserve Bank of India (RBI) before commencing or to carry on business of a non-banking financial institution.

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It has been observed that there are NBFCs which are no longer engaged in the business of NBFI but still continue to hold the CoR even though they are not required/eligible to hold the CoR granted by RBI. In order to ensure that only NBFCs which are actually engaged in the business of NBFI hold CoR, it has been decided that all NBFCs should submit a certificate from their Statutory Auditors every year to the effect that they continue to undertake the business of NBFI requiring holding of CoR under Section 45-IA of the RBI Act, 1934.

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.