The Reserve Bank of India (RBI) has officially cancelled the Certificates of Registration (CoR) of 135 Non-Banking Financial Companies (NBFCs) across the country, with the majority of affected entities concentrated in West Bengal. The central bank issued the directive under Section 45-IA (6) of the Reserve Bank of India Act, 1934, effectively barring these firms from transacting any business as a Non-Banking Financial Institution.
Context and Regulatory Framework
Non-Banking Financial Companies play a critical role in the Indian credit ecosystem, providing financial services to segments often underserved by traditional commercial banks. To operate legally, these entities must maintain a valid CoR from the RBI, which mandates strict adherence to capital adequacy, liquidity, and reporting norms.
The RBI conducts periodic audits and supervisory reviews to ensure that these companies remain compliant with financial stability regulations. Entities that fail to meet these stringent requirements or cease operational activities are subject to the withdrawal of their license to protect depositors and maintain systemic integrity.
Scope of the Regulatory Action
While the crackdown spans several states, including Maharashtra, Telangana, Delhi, Manipur, Tamil Nadu, and Madhya Pradesh, the concentration of cancellations in Kolkata is particularly significant. Firms such as Akshay Fiscal Services Ltd, Alfa Tie-Up Private Limited, and ETL Infrastructure Finance Limited are among the notable names stripped of their operating status.
The affected companies held registrations dating back as far as 1998, with some having operated for over two decades. The RBI’s decision follows a pattern of heightened oversight aimed at cleaning up the non-banking sector and removing dormant or non-compliant entities from the registry.
Expert Perspectives and Industry Impact
Financial analysts suggest that this mass cancellation is a clear signal from the regulator that the era of loose supervision for NBFCs has ended. Experts note that the RBI is prioritizing the removal of
