Appeal Against NBFC Registration Cancellation

Appeal Against NBFC Registration Cancellation

*Note – We only undertake NBFC / RBI appeal assignment when your case is correct.

Package inclusions:
  • Appeal drafting before DFS or Writ Petition before HC
  • Complying your overdue RBI returns
  • Representation before the Ministry of finance or High Court
  • EAT 6 Months 
  • 20+ Years Experience 
Appeal Against NBFC Registration Cancellation

What is NBFC Registration Cancellation?

The reserve bank of India is empowered by the RBI Act to the cancel the NBFC granted to a company, who shall not meet the public interest at large. In 2018 more than 3000+ NBFC License has been cancelled by the RBI due not meeting the minimum net owned fund of Rs 2 Crore.

What are the circumstances in which NBFC Registration cancellation can be done?

  • Deficit in the Net Owned Fund
  • Failed to re-pay the deposits
  • Have failed to meet the Minimum net owned fund of Rs 2 Crore
  • The Operation of NBFC is likely not in the interest of Public at Large
  • Have wilfully violated the Provisions of the Act.
  • Have not filled the require Annual /Quarterly returns to RBI
  • failed to Apply for C-KYC, and Membership of CIC
  • Ignorance with prohibitory orders of RBI
  • Not Carrying NBFC Activity or working on papers with No Actual borrowers

Is it possible for a company to surrender or cancel its NBFC license?

Yes, in the following circumstances, a firm or business entity can opt for its NBFC registration cancellation to the RBI:-

  • On the basis of Suo - Motu;
  • Has a Liquidity Crisis;
  • Is stressed by non-performing assets (NPAs);

What are the circumstances in which a Writ petition should be referred to High Court?

  • When Net owned fund of Rs 2 Cr has been full filled after 31-03-2017 but before 31-03-2018
  • An opportunity of being heard has not been given to the company
  • Show cause notice issued by the RBI and reply on time seeking extension has submitted well on time

Provisions to file Appeal against NBFC Registration cancellation

  • An Appeal under sub-section (7) of Section 45-IA of the Reserve Bank of India Act, 1934 may be filled before the Appellate authority “Department of financial services “ (Time limit to file an appeal is 30 days from the receipt of order)
  • Write Petition Article under 226 can be filled before the high courts 

6 Steps to follow before preparing for Appeal against NBFC Registration Cancellation

  • Double check your ROC Compliance
  • Check your RBI Returns (NBS-9)
  • Tax Audit Reports
  • Quality test of Assets and Liability
  • Minimum NOF of Rs 2 Cr
  • Maintain a file of tax audit reports.

An appeal to the order of cancellation

Before granting an order of cancellation, the RBI gives the concerned company one final chance to be heard, unless the delay in cancelling the certificate of enrolment will jeopardise the interests of depositors or non-banking monetary activity. The aggrieved party has 30 days from the date of the NBFC registration cancellation order to file an appeal with the Central Government.

Cancellation of NBFC licence and its impact

An NBFC whose licence has been cancelled by the RBI must cease operations as soon as the license/registration has been terminated. It will also be barred from performing all normal actions and affairs with immediate effect and unable to pursue any new goal or business. They also won't be allowed to give financial help to the less fortunate, and they won't be able to operate as an NBFC.

Effects of NBFC Registration Cancellation or Surrender

Effects of NBFC Registration Cancellation or Surrender

Final thoughts

Because non-banking financial companies play such a major role in the Indian economy, the Reserve Bank of India monitors their operations closely.

What is the process for filing an appeal with Enterslice in the event of NBFC Registration cancellation?

  • Speak with a member of our team of specialists
  • Receive a call back
  • Consultation with an expert
  • Documentation submission
  • Appeal drafting and filing
  • Our team will keep a close watch on everything.
  • Representation of the client in front of the authorities
  • End to end service

*Any fees, stamp duty, and other costs are extra payable.

In case a company have a valid reason that NBFC License was cancelled by the RBI due to above reasons and have good compliance status of NBFC. Please feel free to write at info@enterslice.com  

Our Expert shall get in touch with you.

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