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AKP Banking & Finance Digest- May 16, 2022

Updated: Sep 22

Read in this week's update, the withdrawal of 239 circulars by RBI on the recommendation of the Regulations Review Authority. RBI accepted the surrender of certificate of registration of seven NBFCs.


Highlights of the Week:
Seven Non-Banking Financial Companies surrender their Certificate of Registration
RBI withdraws 239 circulars
RBI allows lending by commercial banks to NBFCs and small finance banks (SFBs) to NBFC-MFIs, for the purpose of on-lending to priority sectors on an ongoing basis
RBI penalizes payment system operator (PSO)


1. Seven Non-Banking Financial Companies surrender their Certificate of Registration

The Reserve Bank of India (RBI) has accepted the surrender of certificate of registration (CoR) of the following 7 (seven) non-banking financial companies (NBFCs):


Sl. No.

Name of the Company

CoR Issued on

Cancellation Order Date

1

Pondicherry Industrial Promotion Development and Investment Corporation Ltd.

October 05, 2004

April 11, 2022

2

​D. Devaraj Urs Backward Classes Development Corporation Limited

July 26, 2006

April 12, 2022

3

V. Rama Krishna Sons Private Limited

June 20, 2002

April 13, 2022

4

Lucky Mercantile Private Limited

March 06, 1998

April 19, 2022

5

Magnum Credit & Consultants Pvt. Ltd.

March 13, 2001

April 20, 2022

6

Optacredit Fintech Private Limited

December 21, 2016

April 27, 2022

7

Shreyas Holdings Pvt. Ltd.

March 31, 1999

April 29, 2022

Hence, these companies shall not transact the business of a non-banking financial institution.[1]


2. RBI withdraws 239 circulars

RBI has notified the withdrawal of 239 circulars as proposed by the Regulations Review Authority (RRA) which were applicable to the following:

  • all scheduled commercial banks (including regional rural banks);

  • all payments banks;

  • all small finance banks;

  • all local area banks;

  • all authorized dealers; and

  • all primary (urban) co-operative banks.

Further, lists of circulars recommended for withdrawal have been issued separately.[2]

3. RBI allows lending by commercial banks to NBFCs and small finance banks (SFBs) to NBFC-MFIs, for the purpose of on-lending to priority sectors on an ongoing basis

RBI had previously permitted lending by commercial banks to NBFCs and lending by small finance banks (SFBs) to NBFC-MFIs, for the purpose of on-lending to certain priority sectors, till March 2022. Now, it has been allowed on an ongoing basis.[3]

4. RBI penalizes payment system operator (PSO)

RBI has imposed monetary penalty on:

Name of the PSO

Penalty Imposed (in INR)

Reason

Unimoni Financial

Services Limited[4]

29,79,000

(Indian Rupees Twenty-Nine Lakh Seventy-Nine Thousand Only)

Non-compliance with the instruction contained in paragraph 9.1(i) of the Master Direction on Issuance and Operation of Prepaid Payment Instruments (PPI MD) dated October 11, 2017 (as updated on November 17, 2020).



[1] Press Release: 2022-2023/189, Reserve Bank of India, May 10, 2022

[2] Press Release: 2022-2023/204, Reserve Bank of India, May 13, 2022

[3] RBI/2022-23/50FIDD.CO.Plan.BC.No.5/04.09.01/2022-23, Reserve Bank of India, May 13, 2022

[4] Press Release: 2022-2023/198, Reserve Bank India, May 12, 2022

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