MUMBAI: The Reserve Bank of India has cancelled a bulk of non-banking financial companies as those mostly little-known local lenders may have either violated regulatory norms or surrendered licence of their own.
The central bank has taken away "the certificate of registration of the 56 non-banking financial companies (NBFCs)…., in exercise of the powers conferred on it…"
"Following the cancellation of registration certificate, these companies cannot transact the business of a non-banking financial institution," it said. Interestingly, Pune-based Bajaj Finserve has given away its licence.
"We now come under a classification "core investment company", said Rajagopalan, President (Legal), Bajaj Finserv. "Since we do not have any public funds including deposits/borrowings as per the RBI regulations applicable to NBFC we are not required to be registered with RBI."
"RBI do not regulate such companies and hence as required by RBI we have submitted the Registration certificate for cancellation," he said.
Bajaj Finserv continues to be an investment holding company without public deposits/borrowings. Its subsidiary Bajaj Finance, a deposit-taking listed non-banking company, continues to exist with usual lending business.
Out of total cancelled NBFCs, 16 are from Kolkata while more than 10 are Mumbai-based. Some of them include Vapi Investments, Croton Trading Private, Sears Securities & Investments Private, Future Ventures India.
In the wake of Sarada scam, which robbed of poor people life savings the Reserve Bank has been on high alert. Authorities are trying to tighten regulations especially for such tiny companies.
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