NBFC Registration Cancellation and Appeal
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NBFC or Non-Banking Financial Companies are the companies incorporated under Companies Act 2013. NBFCs provide banking services without meeting the legal definition of a bank. According to Section 451(c) of RBI Act, a Non-Banking Company carrying on a business of Financial Institution will be an NBFC. It is governed by Ministry Of Corporate Affairs as well as The Reserve Bank of India.
NBFCs are the companies engaged in the business of loans and advances, acquisition of shares, stock, bonds, debentures, securities issued by Government or any local authority. The main objective of this type of company is to accept deposit under any scheme or manner.
Cancellation of NBFC license
The RBI if at any time find NBFC is not conducting business in the manner specified in the Act or acting against the public interest than he can cancel the certificate of registration granted to an NBFC.
At any time if the Non-Banking Financial Company found the following situation can result in cancellation of Certificate of registration granted:
NBFC ceases to carry on the business of a non-banking financial institution in India
NBFC failed to comply with the conditions of registration specified under the Act and any additional conditions specified by the RBI at the time of issue of Certificate of registration. Like an example fails to maintain the minimum paid-up capital
Requirement i.e. went to below 2 crore
NBFC fails to fulfil the conditions specified above in respect of affairs and capital of the Company.
NBFC fails to comply with any direction issued by the Reserve Bank of India.
NBFC fails to maintain the books of accounts in accordance with the provisions of the Act or RBI directions.
NBFC fails to submit its books of accounts and any other relevant documents to the RBI for inspections.
NBFC has been prohibited from accepting deposit by an order made by the RBI and order has been in force.
Appeal against cancellation:
The RBI, before passing an order of cancellation, shall give an opportunity of being heard to the Company unless it is in an opinion that the delay in canceling the certificate of registration will prejudicial to public interest or the interest of the depositors or the non-banking financial company.
Aggrieved party may appeal against the order of the RBI to central government within 30days from the date of the order of cancellation of registration.