The Reserve Bank of India (RBI) has stepped up its regulatory oversight of the non-banking financial company (NBFC) sector, cancelling the certificates of registration (CoR) of 35 NBFCs for non-compliance and accepting the voluntary surrender of licences from another 16 firms. The move underscores the central bank’s continued push to ensure that only compliant, well-governed entities operate within India’s financial system.
At the same time, RBI announced the restoration of registration for one NBFC—Social Leasing India Ltd—following favourable orders from appellate authorities and courts, highlighting that regulatory decisions remain subject to legal scrutiny.
Credits: Moneylife
Why RBI Cancelled NBFC Registrations
According to regulatory disclosures, the RBI cancelled the registrations of 35 NBFCs primarily due to failure to comply with key regulatory requirements. These include not meeting the conditions under which registration was originally granted, as well as ceasing NBFC-related business activities altogether.
In addition, 16 NBFCs voluntarily surrendered their CoR. Following this surrender, the RBI formally cancelled their registrations under the provisions of the RBI Act, 1934. The central bank clarified that surrendering a licence does not exempt an entity from regulatory action and must follow due process.
Delhi-NCR Emerges as a Key Concentration Zone
A striking aspect of the RBI’s action is the geographical concentration of cancelled NBFCs. Most of the affected companies are based in Delhi and the National Capital Region (NCR), with only a handful operating outside the region.
Among the Delhi-NCR-based firms whose registrations were cancelled are AG Securities, ALB Leasing & Finance, ATM Credit & Investments, Corporate Capital Services India, Pearls Hire Purchase Corporation, Quasar India Fincap, Sunlife Securities, Triveni Vinimay, Unitron Finlease, and Veera Securities and Finlease.
Outside Delhi-NCR, Shivom Investment & Consultancy Ltd in Mumbai and Satya Prakash Capital Investment Ltd in Jabalpur, Madhya Pradesh, are among the few entities impacted.
Firms Exiting NBFC Business Across Major Cities
RBI also highlighted a separate category of NBFCs that exited the non-banking financial institution (NBFI) business altogether. These cancellations span multiple cities and reflect changes in business models rather than enforcement action alone.
In Mumbai, Dharmesh Stock Broking Private Ltd and Park Avenue Engineering Ltd fall under this category. Kolkata accounts for a significant share, including Millennium Holdings Pvt Ltd, Celestial Consultants Pvt Ltd, and Peerless Financial Services Ltd. Chennai-based Damayanti Finance & Properties Pvt Ltd and Delhi-based Liquid Paper Finserve Pvt Ltd and Arvind Overseas Project Services Pvt Ltd were also listed.
NBFCs Reclassified as Unregistered CICs
In another regulatory adjustment, RBI cancelled the registration of certain NBFCs that were found to meet the criteria for unregistered core investment companies (CICs), which do not require NBFC registration.
These include Shyam Basic Infrastructure Projects Pvt Ltd in Jaipur, Shruti Finsec Pvt Ltd in Kanpur, and Sita Investment Company Ltd in Raipur, Chhattisgarh. RBI clarified that these cancellations were based on regulatory classification rather than punitive action.
Mergers, Dissolutions and Legal Closure
Some cancellations stemmed from companies ceasing to exist as legal entities due to mergers, amalgamations, voluntary strike-offs, or dissolution. In Mumbai, this included Edelweiss Retail Finance Ltd, while Kolkata-based entities such as Super Commodities Pvt Ltd, Silfix Tradelink Pvt Ltd, Sakthi Traders Pvt Ltd, and Yaduka Financial Services Ltd were also affected.
RBI Restores Licence of Social Leasing India
Amid the cancellations, RBI restored the registration of Social Leasing India Ltd, an NBFC based in Dehradun, Uttarakhand, following orders from appellate authorities and courts. While the RBI did not disclose the specific reasons for the earlier cancellation or the legal grounds for reinstatement, it made its expectations clear.
The central bank cautioned the company to strictly comply with all provisions of the RBI Act, 1934, and adhere to reporting, supervisory, and governance requirements going forward.
Credits: BFSI News
Regulatory Message to the NBFC Sector
RBI reiterated that holding an NBFC licence is contingent on continuous compliance with prudential norms, governance standards, and operational requirements. Regulatory relief granted through judicial or appellate processes, the central bank said, does not dilute an entity’s obligation to follow the law in both letter and spirit.
As RBI continues to tighten supervision, the latest round of cancellations signals a clear message: regulatory discipline is non-negotiable in India’s evolving financial ecosystem.
