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Appeal Against NBFC License Cancellation

Appeal Against NBFC License Cancellation

Appeal against NBFC License cancellation

<strong>What is NBFC License 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 canceled by the RBI due not meeting the minimum net owned fund of Rs 2 Cr.

What are the circumstances in which NBFC License can be canceled?

  • Failed to re-pay the deposits
  • Have failed to meet the Minimum net owned fund of Rs 2 Cr by 31-03-2017
  • The Operation of NBFC is likely not in the interest of Public at Large
  • Have willfully 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

What is circumstanced whereas Write 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

Where to file Appeal against cancellation of NBFC License?

  • 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 โ€œDepartment of financial services โ€œ (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 License 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
  • Adequate reason for

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