The Reserve Bank of India (RBI) has taken action against 7 non-banking financial companies (NBFCs) in April. The license of 6 NBFCs has been cancelled, and a monetary penalty has been imposed on one. The cancelled licenses include those of Unitara Finance Limited in Madhya Pradesh, Thamiraparani Investments Private Limited, Armusk Infrastructure Investments Limited, Vishwapriya Finance Limited, Matrix Financial Services Limited, all in Tamil Nadu, and Welfil Securities Limited in Gujarat. These companies are no longer allowed to operate as NBFCs under the RBI Act 1934.
The RBI has also imposed a penalty of Rs 71.30 lakh on Mahindra & Mahindra Financial Limited for violating various rules. The company failed to disclose processing fees and other charges in some loan applications, did not provide loan details to some borrowers, and did not give some borrowers a last chance to repay their loans before the sale or auction of vehicles. The company also allotted multiple customer identification codes to some customers instead of a unique code.
In addition to the cancelled licenses and penalty, 11 NBFCs have surrendered their licenses voluntarily for various reasons. The RBI’s actions are aimed at ensuring that NBFCs operate in a fair and transparent manner, and that customers are protected from unfair practices.
The cancelled licenses and penalty imposed by the RBI will not affect the transactions taking place between customers and the companies. However, the companies that have had their licenses cancelled will no longer be able to operate as NBFCs, and customers will need to take their business to other licensed institutions. The RBI’s actions demonstrate its commitment to regulating the NBFC sector and ensuring that companies operate in compliance with the law. The central bank will continue to monitor the sector and take action against companies that fail to comply with regulations.