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Amid fund crunch, RBI scraps registration of 31 NBFCs; majority from Bengal

A majority of voluntary application for licence cancellation is also from Bengal

Press Trust of India  |  Mumbai 

Reserve Bank of India
FILE PHOTO: A security personnel member stands guard at the entrance of the Reserve Bank of India (RBI) headquarters in Mumbai | Photo: Reuters

The on Friday cancelled the certificate of registrations of as many as 31 non-banking companies (NBFCs) for unspecified reasons.

It also cancelled the certificate of registrations of 17 NBFCs following a request by them for the same. The action comes amid difficulties faced by the NBFCs sector.

A majority 27 of the 31 companies which lost their licences are from Bengal, the central bank said in a statement.

Bengal is followed by Uttar Pradesh, which has seen four licence cancellations, the RBI said, making it clear that these companies should not carry out business activities from here on.

A majority of voluntary application for licence cancellation is also from Bengal, it said.

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

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

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

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

First Published: Fri, November 09 2018. 20:45 IST