RBI CANCELS REGISTRATIONS OF 30

NBFCS; MORE THAN 500 NBFCS

SHUT OPERATION THIS YEAR
• RBI in a notification informed that it has
cancelled the certificates of registrations of as
many as 30 NBFCs. Most of these NBFCs were
from West Bengal followed by Uttar Pradesh,
Andhra Pradesh, Telangana and Rajasthan.
• RBI said these companies shall not transact
the business of a Non-Banking Financial
Institution, as defined in clause (a) of Section
45-I of the RBI Act, 1934.
• According to the amendment in the RBI Act of
1997, the central bank had mandated the
minimum capital requirement for NBFCs at Rs 25
lakh. The requirement was increased to Rs 2
crore for new NBFCs.
• However, the old ones were allowed to continue
with the earlier capital requirement until RBI
issued a revised regulatory framework in 2014.
Under this, it had set a deadline for all NBFCs to
reach the minimum net owned fund of Rs 2 crore
before 31 March 2017.
• The RBI’s financial stability report highlighted that
the aggregate balance sheet size of the NBFC
sector as on 31 March 2018 was Rs 22.1 trillion.