Under what circumstances the Reserve Bank of India may cancel a certificate of registration granted to non-banking financial company (NBFC) under RBI Act, 1934?

CS Executive · Economic, Business and Commercial Laws · PYQS · December 2021
Under what circumstances the Reserve Bank of India may cancel a certificate of registration granted to non-banking financial company (NBFC) under RBI Act, 1934?

Answer & Explanation:

The Reserve Bank of India may cancel a certificate of registration granted to a non-banking financial company under Section 45-IA of the Reserve Bank of India Act, 1934, if such company- Ceases to carry on the business of a non-banking financial institution in India; or Has failed to comply with any condition subject to which the certificate of registration had been issued to it; or At any time fails to fulfil any of the conditions such as adequate capital structure and earning prospects; public interest, monetary stability, and economic growth etc. or Fails to comply with any direction issued by the Reserve Bank of India under the provisions of Chapter III B of RBI Act; or Fails to maintain accounts in accordance with the requirements of any law or any direction or order issued by the Reserve Bank of India under the provisions of Chapter III B of RBI Act; or Fails to submit or offer for inspection its books of account and other relevant documents when so demanded by an inspecting authority of the Reserve Bank of India; or Has been prohibited from accepting deposit by an order made by the Reserve Bank of India under the provisions of Chapter III B of RBI Act and such order has been in force for a period of not less than three months.

Topics: Banking Laws

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