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Appeal Against Cancellation Of NBFC Registration

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Mani Dahiya | Fintech Compliance Professional | Updated Apr 05, 2020

The Non-banking Financial Company generally known as the NBFC plays an important role    
in the Indian economy for having a viable source for funding. The Reserve Bank of India is
accountable for the regulation and supervision of the Non Banking Financial Company for
having an e ective nancial system. The Reserve Bank of India is authorized for issuing MOST POPULAR SERVICES
and canceling the certi cates of NBFC Licenses under the RBI Act, 1934.

In the year 2016 a number of NBFC licenses were canceled. This was done because a lot of  Non-ST PI Registration
NBFCs were promising loans at pro table rates and running away with their money.
 E Waste Recycling Plant Setup
   HALAL Certification

NBFC License Cancellation  Payment Gateway License

 Hand Sanitiz er Manufacturing
There are certain compliances that are required to be ful lled by the companies carrying
License
on the NBFC activities. The RBI is in power to cancel the NBFC License if the companies
 RERA Registration
don’t meet the public interest at large. The RBI is also in the capacity to cancel the license if
the requirements are not ful lled by the company like the minimum net owned fund is of  GST Sevices Rate

Rs. 2 Crore is not ful lled.  Warehouse Consulting Service

   Partnership to Private Ltd

 Assets Reconstruction Company
Conditions for Obtaining a Certificate of Registration
A Non Banking Financial Company before undertaking business has to acquire a COR from
the Reserve Bank of India. The below listed conditions have to be ful lled for acquiring an
RELAT ED SERVICES
NBFC License-

 The Company has to be registered as per the Companies Act, 2016 or Companies Act,  Proprietorship Firm

1954.  One Person Company

 The Company must involve itself in the nancial activities.  If the net nancial ow is  Partnership Firm
more than 50%, then that company shall get the NBFC Registration Certi cate.  LLP Registration
 The Company which holds a minimum paid up capital of Rs. 2 crores.  The Foreign  Private Limited Company

Company and foreign investors who want to start an NBFC should have a paid-up
capital of Rs. 5 crores.
 The RBI holds the right to inspect the books of account of the company for ensuring It`s Time to Change
that the company is in position to pay the depositors to claim and the a airs of the Your
COMPLIANCE OFFICER
company shall not be damaging to the interest of its depositors and have adequate

capital structure.
 

Cancellation of Certificate Of Registration By The RBI

In case the RBI comes to know that the NBFC is not functioning or conducting business
activities according to the rules and regulations laid down by the government or opposed
to the public policy, then it holds the right to cancel the registration.

   Get 1 months free compliance

support
Reasons for NBFC License Cancellation
 24/7 Expert Advice anytime
Following are the situations which can result in the cancellation of certi cate of the granted anywhere
registration -
 200+ Top CA/CS/Legal Team
 The NBFC has ceased to carry the business.
 The NBFC has failed to comply with the conditional requirement speci ed under the
L EAR N M O R E
Act.
 The NBFC has failed to ful ll the conditions speci ed with respect to the a airs and

capital of the company.

LEGAL GUIDE
 The NBFC has failed to comply with the directions laid down by the RBI.

 There has been a failure to maintain the books of accounts.

 There has been a failure to repay deposits.
 The NBFC has failed to meet the minimum net owned fund of R. 2 Cr.

 The NBFC has failed to comply with annual/quarterly returns to RBI.

 The NBFC is not carrying NBFC Activity or working on papers with No Actual borrowers.
 
Download legal guide on how to
Where to File An Appeal In Case Of Cancellation Of successfully start and manage
NBFC License? business in India & achieve 100%
compliance.
An appeal can be led under sub-section (7) of Section 45-IA of the RBI Act, 1934 before the
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Department of Financial Services, which is the Appellate authority. It is to be led within
 thirty days from the receipt of the order. A Writ Petition can be led under Article 226
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before the High Court.

 
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Steps To Be Followed Before Filing an Appeal against
the NBFC License Cancellation D O WN L O AD

 To Double check the ROC compliances

 To Check the RBI Returns
 To Keep track of the tax audit reports
USER
 To do Quality tests of assets and liabilities RAT ING
 To have Minimum NOF of Rs. 2 Cr.
 

The Opportunity of Being Heard 
Before passing an order of cancellation, the authorities give a fair opportunity of being 4.59 average
heard to the company unless it is of the opinion that the delay in cancellation will be based on
prejudicial to the public interest or against the interest of the depositors or the NBFC. 281 reviews.

 
 5
195
What Is The Remedy Available If Aggrieved By The star
Order?  4
67
Any company aggrieved by order of the cancellation has the right to le an appeal within star

thirty days from the order of cancellation of COR. If in case no appeal is led, then the  3
decision of the central government is nal. If In case your NBFC license is canceled, please 14
star
feel free to post a query out here. Our experts shall get back to you.
 2
*Any fee, stamp duty, and the miscellaneous expenses shall be payable extra. 1
star
 
 1
3
Corpseed Three Easy Steps to Appeal Against Cancellation Of NBFC star
Registration
Connect with team Corpseed @  +91 7558 640 644

We will discuss your requirement & le appeal documents with RBI

NBFC License issued to you by RBI

Mani Dahiya
Fintech Compliance Professional | Company Act, RBI Act ,
Legal

An enthusiast, adaptable, ambitious, compassionate,

courageous, amiable, intuitive and extremely focused
person. She is a BA.LLB (H) graduate from Amity Law
School, Delhi. She is very active and rarely bored. She is an
all-time foodie. She loves h...

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