RBI Cancels Registration Of 150 NBFCs; Majority Of Firms Based In Delhi And West Bengal: Check Full List

The Reserve Bank of India (RBI) has withdrawn the registration certificates of 150 Non-Banking Financial Companies (NBFCs), preventing them from continuing regulated financial operations such as lending, leasing and investment activities.

The action was announced through a notification issued by the central bank on Thursday under provisions of the Reserve Bank of India Act, 1934.

An examination of the list released by RBI has revealed that West Bengal and Delhi accounted for the largest share of the affected firms. Around 75 companies were registered in West Bengal, mainly in Kolkata and surrounding areas, while nearly 67 entities were based in Delhi. The remaining companies belonged to states including Telangana, Karnataka, Bihar, Haryana and Madhya Pradesh.

RBI Action Under Banking Law

In its notification, RBI said the cancellations were carried out under Section 45-IA (6) of the RBI Act. Following the cancellation, these companies are no longer authorised to function as NBFCs.

The central bank stated that the firms would not be permitted to carry out the business of a non-banking financial institution as defined under the law.

NBFCs operate in areas such as loans, investments, hire purchase, leasing and financing services. Although they provide financial services similar to banks, they do not hold banking licences and are governed separately under RBI regulations.

Small And Mid-Sized Firms Affected

The list includes several finance and investment companies, many of them small and mid-sized entities. Among the companies registered in West Bengal are Akin Vincom, Blue Ring Commercial, Crescent Leasing, Regis Industries, and so on. Delhi-based firms include Layman Finance, Peak Securities, Moon Star Capital, and many more.

Some of the cancelled entities were involved in portfolio management, leasing, securities and investment-linked businesses.

RBI did not specify individual reasons behind the cancellations. In earlier regulatory actions involving NBFCs, common reasons have included non-compliance with regulatory norms, inadequate net owned funds, failure to meet reporting standards and voluntary surrender of licences.

Impact On Business Operations

The affected firms, after the cancellation of registration, cannot undertake any business of NBFC under RBI definition. This includes lending and financing activities under the ambit of the central bank.

But the cancellation of NBFC licence does not automatically mean closure of the company. The companies can carry on other business activities if permitted by applicable law, but they cannot represent themselves as RBI-registered NBFCs.

In the last couple of years, RBI has enforced more stringent compliance measures and has kept a closer eye on the governance practices of NBFCs. The sector plays a vital role in providing credit to individuals, traders and small enterprises outside the traditional banking system.

What It Means For Customers

Existing borrowers of these firms may be required to follow their current loan repayments schedules, until otherwise specified by regulators or courts. But the affected companies will not be able to issue fresh loans or carry out any NBFC-related financial activities cancellation.

Customers dealing with these companies may also need to verify whether servicing, repayment collection or customer support functions continue through legally permitted arrangements.

Here's the full list of NBFCs which had lost their licenses: