Reserve Bank said it has canceled registration of 22 non-banking financial companies (NBFCs) including that of Amazan Capital and Mascot Commerce.
- The RBI said it canceled the certificate of registration of the NBFCs in exercise of the powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934.
- Following the cancellation of registration certificate, these companies cannot transact the business of a non-banking financial institution.
- NBFCs whose registration have been canceled include Kundan Leasing and Finvest, Raseera Investments, Limtex Impex, Dignity Motors Finance, Akansha Consultancy Services, Bini Commercial Enterprises, Nirankar Investments, and Surin Investments.
- Earlier this month, the RBI had canceled registration of six other NBFCs.
- Non-bank financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold abanking license.
- These institutions typically are restricted from taking deposits from the public depending on the jurisdiction.
- The specific banking products that can be offered by NBFCs depends on the jurisdiction, and may include services such as loans and credit facilities, savings products, investments and money transfer services.
- In some jurisdictions, such as New Zealand, any company can engage in banking business, except they are not allowed to use the word bank in their name.
- A company can only call itself a bank if it is a registered as such with the nation’s central bank.