RBI bars 56 NBFCs from conducting business

The Reserve Bank of India has cancelled the certificate of registration of 56 non-banking finance companies (NBFCs), including ABNL, Future Ventures India and Bajaj Finserve.

Following the cancellation of registration certificate, these companies cannot transact in the business of an NBFC as laid down under the Reserve Bank of India Act, 1934. A Bajaj Finserv spokesperson said since Bajaj Finance is already an NBFC and Bajaj Finserv is now a core investment company, the NBFC registration for the latter would not have served any purpose. ABNL Investment’s share in Aditya Birla Nuvo’s net profit was miniscule at 0.17 per cent. Future Ventures India has now metamorphosed into Future Consumer Enterprise, a sourcing-to-supermarket food company of the Future Group.

According to Section 45I-A of the RBI Act, among others, the central bank may cancel a certificate of registration granted to an NBFC if it ceases to carry on the business of an NBFC; or fails to comply with any condition subject to which the certificate of registration had been issued to it.

The RBI statement did not specify any reason for cancellation of the registration certificate. (Then Hindu)