The Reserve Bank of India (RBI) on Wednesday said that it has cancelled the Certificate of Registration (CoR) issued to the following five Non-Banking Financial Companies (NBFCs) due to irregular lending practices. These NBFCs are: UMB Securities Limited, Anashri Finvest Limited, Chadha Finance Private Limited (now known as Chadha Finance Limited), Alexcy Tracon Pvt Ltd and Jhuria Financial Services Private Limited.
The central bank added that above companies shall not transact the business of a Non-Banking Financial Institution (NBFI), as defined in clause (a) of Section 45-I of the RBI Act, 1934.
Elaborating further RBI said that the CoR of NBFCs have been cancelled on account of violation of RBI guidelines on outsourcing and Fair Practices Code in their digital lending operations undertaken through third party apps which was considered detrimental to public interest. "These companies were also not complying with the extant regulations pertaining to charging of excessive interest and had resorted to undue harassment of customers for loan recovery purposes," it added.
Last month, Reserve Bank had also informed that 22 NBFCs, including BNP Paribas India Finance, Swiss Leasing and Finance, and Available Finance, had surrendered their registration certificates. The central bank has cancelled their Certificate of Registration (CoR) as they have surrendered the same.