Reserve Bank of India cancels registration of 31 NBFCs

The Reserve Bank of India on Friday cancelled the certificate of registrations of 31 non-banking finance companies (NBFCs) for some unspecified reasons.

The RBI  also cancelled the certificate of registrations of 17 NBFCs following a request by them for the same. The action has come amid the difficulties being faced by the NBFCs sector.

As many as 27 of the 31 companies which lost their licences are from Bengal, the RBI said in a statement.

Next is Uttar Pradesh, which has seen four NBFC licence cancellations, the RBI said.  It made it clear that these companies should not carry out business activities from here on.

It said that a majority of voluntary application for licence cancellation are also from Bengal.

The list also includes Ramky Finance & Investment, which is Hyderabad based.  According to the RBI announcement, the list also has city-based Propycon Trading & Investments.

It should be noted that there are more than 12,000 registered NBFCs in the country under the regulation of the RBI, with only a  handful of them being deposit-taking ones which are tightly regulated.

The NBFC sector is facing liquidity troubles following the non-payment of dues by the troubled infra lender IL&FS since the month of August.

The RBI has blamed many NBFCs for borrowing short for long-term assets, which have resulted in potential asset-liability mismatches especially in the times of increasing rates where they face trouble refinancing their borrowings.

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