RBI: These days, the Reserve Bank of India (RBI) is feeling stern. Maharashtra’s cooperative banks were prohibited from operating after Paytm Payments Bank’s licence was revoked. As of this Saturday, three NBFCs’ registration certificates have been revoked by RBI.
Impact on Specific Entities
The severe measures taken by the RBI have affected Bharathu Investment and Finance India, Cox & Kings Financial Services, and PSPR Enterprises. In addition, nine housing businesses and NBFCs have given up their licences.
Prominent Names Exiting
Nine NBFCs and one housing finance firm have turned in their licences, according to information provided by the Reserve Bank. Among them is Reliance Home Finance Limited as well. After deciding to leave the housing finance institution industry, the company has chosen to surrender the licence. Smile Microfinance, JFC Impex, Kaveri Tradefin, and Ginni Tradefin are the four non-bank finance companies that have ceased operations out of the nine that have turned in their licences.
In addition, the licences of Bohra & Company, SK Finserv, JG Trading and Investment, Microfirm Capital, and Mahico Grow Finance Private Limited were given up. These businesses have all provided various justifications.
The RBI claims that these NBFCs were not fully adhering to the rules. We cannot put up with this. According to the central bank, NBFCs are established to achieve specific economic goals. It is strange that they should insist on being like banks. The RBI opposes expanding the number of NBFCs that are able to take deposits. This is the cause of the lack of new licences issued. Additionally, there are now only 26 NBFCs receiving deposits, down from 200 previously.
Impending Regulatory Changes
These RBI rulings unequivocally demonstrate the impending regulatory changes affecting the financial industry. RBI is not willing to put up with the loophole. Numerous businesses have given up their licences for this reason. By holding finance companies accountable, the central bank hopes to maintain the stability and health of the financial system while also adhering to regulatory requirements.