{"id":967,"date":"2021-01-07T07:19:07","date_gmt":"2021-01-07T07:19:07","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=967"},"modified":"2021-01-07T07:21:56","modified_gmt":"2021-01-07T07:21:56","slug":"cancellation-or-surrender-of-nbfc-registration","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/","title":{"rendered":"Cancellation or Surrender of NBFC Registration: A Complete Guide"},"content":{"rendered":"\n<p>In India, NBFC or Non\nBanking Financial Company works at a crucial position as it not only offer\nloans and assistance to weaker sections but provides sound financial growth to\nthe economy as well. Therefore, the only body having that have the authority to\nregulate and administer the working of NBFC in India is RBI (Reserve Bank of\nIndia). However, over the period of time, there has been a significant decrease\nin the number of NBFCs in India. The reason behind the same is either the\ncancellation or surrender of NBFC Registration.<\/p>\n\n\n\n<p>In this blog we will\ndiscuss the concept of cancellation or surrender of NBFC Registration, together\nwith its effects.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a8f66044ae\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a8f66044ae\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/#Requirements_For_Obtaining_NBFC_Registration_In_India\" title=\"Requirements For Obtaining NBFC\nRegistration In India\">Requirements For Obtaining NBFC\nRegistration In India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/#Can_A_Company_Surrender_of_NBFC_Registration\" title=\"Can A Company Surrender of NBFC Registration?\">Can A Company Surrender of NBFC Registration?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/#List_Of_Companies_That_Have_Surrendered_NBFC_Registration\" title=\"List Of Companies That Have\nSurrendered NBFC Registration\">List Of Companies That Have\nSurrendered NBFC Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/#When_Can_RBI_Cancel_NBFC_Registration\" title=\"When Can RBI Cancel NBFC Registration?\">When Can RBI Cancel NBFC Registration?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/#NBFCs_Whose_Registration_Have_Been_Cancelled_by_RBI\" title=\"NBFCs Whose Registration Have Been\nCancelled by RBI\">NBFCs Whose Registration Have Been\nCancelled by RBI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/#Effects_of_Cancellation_or_Surrender_of_NBFC_Registration\" title=\"Effects of Cancellation or\nSurrender of NBFC Registration\">Effects of Cancellation or\nSurrender of NBFC Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/cancellation-or-surrender-of-nbfc-registration\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Requirements_For_Obtaining_NBFC_Registration_In_India\"><\/span>Requirements For Obtaining NBFC\nRegistration In India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The key requirements for obtaining NBFC Registration in India are as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/449-Converted.png\" alt=\"Requirements to get NBFC Registration \" class=\"wp-image-974\" width=\"619\" height=\"538\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/449-Converted.png 750w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/449-Converted-300x261.png 300w\" sizes=\"(max-width: 619px) 100vw, 619px\" \/><\/figure><\/div>\n\n\n\n<ol><li>The company needs to be registered under the provisions of the Companies Act 2013;<\/li><li>The company needs to undertake financial activities based on the provisions of the <strong>RBI Act 1934<sup><a href=\"https:\/\/rbidocs.rbi.org.in\/rdocs\/Publications\/PDFs\/RBIA1934170510.PDF\" class=\"text-primary\"><strong><em>[1]<\/em><\/strong><\/a><\/sup><\/strong>;<\/li><li>Every business entity needs to get its certificate of <strong><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/nbfc-registration\">NBFC registration in India<\/a><\/strong> if the financial flow of the business surpasses the limit of 50 percent of the total assets;<\/li><li>An amount of Rs 2 crores is needed as NOF (Net Owned Fund) by the company;<\/li><li>The Applicant Company needs to produce the proof of tax payment against the total capital invested in the NBFC;<\/li><li>An NBFC must be in a position to pay of claims to its both present and future investors in full;<\/li><li>It cannot carry out any operation which is prejudicial to the interest of the investors;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_A_Company_Surrender_of_NBFC_Registration\"><\/span>Can A Company Surrender of NBFC Registration?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, a company or a business entity can\nsurrender of NBFC Registration to the RBI in the situations as follows:<\/p>\n\n\n\n<ol><li>On a Suo Motu basis;<\/li><li>Faces Liquidity Crunch;<\/li><li>Suffers NPA (Non-Performing Assets) Stress;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"List_Of_Companies_That_Have_Surrendered_NBFC_Registration\"><\/span>List Of Companies That Have\nSurrendered NBFC Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The companies that have surrendered\ntheir NBFC License to the Apex Bank are as follows:<\/p>\n\n\n\n<ol><li>Reliance\nNet;<\/li><li>NischayaFinvest\nPrivate Limited;<\/li><li>Penrose\nMercantilesPrivate Ltd;<\/li><li>Manohar\nFinance India Ltd;<\/li><li>Chandelier\nTracon Pvt Ltd;<\/li><li>Sanghi\nHire Purchase Ltd;<\/li><li>M\/s\nK &amp; P Capital Services Private Ltd;<\/li><li>M\/s\nBFIL Finance Pvt Ltd;<\/li><li>M\/s\nUnique Pharmaceutical Laboratories Private Ltd;<\/li><li>M\/s\nRoopaSona Leasing Private Limited;<\/li><li>M\/s\nRBS Financial Services (India) Private Limited;<\/li><li>M\/s\nSturdy Sales Private Limited;<\/li><li>M\/s\nSummit Inport Services Limited;<\/li><li>M\/s\nParagon Securities Pvt. Ltd;<\/li><li>M\/s\nN. S. Hire Purchase Private Limited;<\/li><li>M\/s\nHRG Finance &amp; Investment Consultants Private Limited;<\/li><li>M\/s\nRajat Capital Market Private Limited;<\/li><li>M\/s\nAashna Investments Private Limited;<\/li><li>ShapoorjiPallonji\nLimited;<\/li><li>Natwest\nInvestments;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Can_RBI_Cancel_NBFC_Registration\"><\/span>When Can RBI Cancel NBFC Registration?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per section 45 \u2013 IA (6), the RBI or\nReserve Bank of India can cancel NBFC Registration in the situations as\nfollows:<\/p>\n\n\n\n<ol><li>If an NBFC or Non Banking Financial Company ceases to carry out the operations specified under the RBI Act;<\/li><li>In case an NBFC has failed to abide by the conditions and stipulations prescribed in the COR (Certificate of Registration);<\/li><li>If in case an NBFC has failed to comply with the additional stipulations prescribed by the RBI at the time of issuing COR (Certificate of Registration);<\/li><li>NBFC fails to satisfy the conditions specified with regard to the affairs and capital of the said company;<\/li><li>NBFC fails to adhere to the directions issued by the Apex Bank;<\/li><li>In case an NBFC has failed to maintain the book of accounts and records in accordance with the provisions of the RBI Act;<\/li><li>If an NBFC has defaulted in submitting the books of accounts for inspection;<\/li><li>If in case an NBFC has been restricted from accepting deposits based on the order passed by the Bank, and such an order has been in force for not less than 3 months;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NBFCs_Whose_Registration_Have_Been_Cancelled_by_RBI\"><\/span>NBFCs Whose Registration Have Been\nCancelled by RBI<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The NBFCs whose license or registration\nhave been cancelled by RBI are as follows:<\/p>\n\n\n\n<ol><li>Murat Viniyog Private Limited;<\/li><li>Koneru Investments Private Limited;<\/li><li>BP Capital Private Limited;<\/li><li>Marudhar Lease Financing Limited;<\/li><li>Khevana Investments Limited;<\/li><li>Star Line Leasings Limited;<\/li><li>Target Credit and Capital Private Limited;<\/li><li>Vishwakarma Strips and Investments;<\/li><li>PurohitFinlease Limited;<\/li><li>Royal Moga Hire Purchase Private Limited;<\/li><li>Oak Finalease Private Limited;<\/li><li>Primus Capital Private Limited;<\/li><li>Bharat Finance and Industries Limited;<\/li><li>Signature Finance Private Limited;<\/li><li>Dee Bee Leasing &amp; Hire Purchase Private Ltd;<\/li><li>Jindal Finlease Private Limited;<\/li><li>B L S Investments Pvt Limited;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Effects_of_Cancellation_or_Surrender_of_NBFC_Registration\"><\/span>Effects of Cancellation or\nSurrender of NBFC Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The effects of cancellation or surrender of NBFC Registration can be summarised as:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/Effects-of-Cancellation-or-Surrender-of-NBFC-Registration.png\" alt=\"Effects of NBFC Registration Cancellation\" class=\"wp-image-973\" width=\"742\" height=\"371\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/Effects-of-Cancellation-or-Surrender-of-NBFC-Registration.png 900w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/Effects-of-Cancellation-or-Surrender-of-NBFC-Registration-300x150.png 300w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/Effects-of-Cancellation-or-Surrender-of-NBFC-Registration-768x384.png 768w\" sizes=\"(max-width: 742px) 100vw, 742px\" \/><\/figure><\/div>\n\n\n\n<ol><li>Will\nnot be able to carry out the business activities prescribed by the Apex Bank;<\/li><li>Will\nnot be able to undertake any new objective or business;<\/li><li>Cannot\nprovide financial assistance to the weaker sections;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In a nutshell, Cancellation or Surrender of NBFC Registration, it is crystal clear from the above discussion that an NBFC or Non-Banking Financial Company acts as a backbone in offering finance to the business and weaker sections of the society. <\/p>\n\n\n\n<p style=\"text-align:left\">Further, it shall be relevant to state that, at present, the Indian banking sector has been struggling hard with an extraordinary liquidity crunch due to various scams. Therefore, these corrupt and unethical effects have forced the Reserve Bank of India (RBI) and the Indian government to implement special measures in order to support the NBFCs and housing finance companies operating in India.<\/p>\n\n\n\n<p><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/complete-overview-of-regulations-for-nbfcs\/\">A Complete Overview of Regulations for NBFCs<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In India, NBFC or Non Banking Financial Company works at a crucial position as it not only offer loans and assistance to weaker sections but provides sound financial growth to the economy as well. Therefore, the only body having that have the authority to regulate and administer the working of NBFC in India is RBI [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":968,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[58],"tags":[152],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/967"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=967"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/967\/revisions"}],"predecessor-version":[{"id":982,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/967\/revisions\/982"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/968"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}