Appeal Against NBFC License Cancellation

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 Writ 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 “Department of financial services “ (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

In case a company have a valid reason that NBFC License was cancelled by the RBI due to above reasons and have good compliance status of NBFC. Please feel free to write at info@kbng.in

our Expert shall get in touch with you.