The Reserve Bank of India has cancelled the registration certificates of 7 Non-banking finance companies. These are mentioned below :
- U K Fin Services Limited, Prabhat (India) Limited,
- Compusta Securities Private Limited,
- Malpani Financial Services Private Limited,
- Harshad Investments Private Limited
- Sajjan Commercial Enterprises Ltd.
- Vishav Dealer Private Limited,
These corporations are not engaged in the provision of a non-banking financial institution, the Reserve Bank of India stated in a press release on 29 October. Overall the years, the reserve bank has been increasing supervision and management of non-banking companies as they are perceived to be high-risk in essence and more vulnerable to shocks during the economic slowdown.
In November 2018, the Reserve Bank of India cancelled the registration of 33 Non-banking finance companies. In January 2019, the Reserve Bank of India cancelled 32 Non-banking finance companies licences and in May 2020 the regulator cracked 14 Non-banking finance companies.
Just after the 2018 IL&FS crisis and later the DHFL episode, several Non-banking finance companies faced a liquidity crunch. Banks were wary of taking more exposure to Non-banking finance companies, and money markets preferred only top-rated firms.
NBFCs are involved in a range of lending operations, primarily supplying money from banks and money markets. They loan to real estate companies and also offer gold and housing loans, among other things.
The Reserve Bank of India said that 2 Non-banking finance companies had decided to surrender their registration certificate. These are
- Hyderabad-based Snehalata Finance Limited
- Kanpur-based Jagran Media Network Investment Private Limited.