What Is Appeal Procedure Against NBFC Registration Cancellation By RBI?
The Reserve Bank of India is empowered to cancel the certificate of registration of Non-Banking Financial Companies (NBFCs) in exercise of the powers under the Reserve Bank of India Act, 1934. Each NBFC whose registration certificate has been cancelled by the RBI cannot transact the business of a non-banking financial institution.
These NBFCs can seek justice from the appellate authority under sub-section (7) of Section 45-IA of the Reserve Bank of India Act, 1934. Under this, company aggrieved by the order of cancellation of certificate of registration may prefer an appeal to the Central government within a period of thirty days from the date on which such order is communicated and the decision of the Central Governmentshall be final, provided that before making any order of rejection of appeal, such company shall be given a reasonable opportunity of being heard.
The Reserve Bank of India (RBI) has taken step against activities of entities which are fraudulently impersonating as non-banking finance companies (NBFCs) registered with the Reserve Bank of India, by cancelling the Certificate of Registration. These type of entities are promising loans to the needy people at attractive rates and collecting money from them as processing charges for the loans/advances and vanish with the money so collected. These type of fraudulent activities are punishable under the law.