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Appeal against NBFC License Cancellation

Note –NBFC / RBI appeal assignment is only undertaken when your case is correct.

  • First of all, an appeal is drafted before DFS or a Petition can be made before HC.
  • Then overdue RBI returns should be complied
  • A representation should be made before the Ministry of finance or High Court
  • EAT 6 Months
  • 20+ Years Experience

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What do you mean by NBFC License Cancellation?

NBFC license is cancelled by the Reserve Bank of India which is not meeting the public interest at large. The right to cancel the license has been empowered by RBI act. 3000+ NBFC license has been cancelled due to not meeting the requirement of minimum net owner fund of INR 2 Crores in 2018.

Circumstances under which NBFC license can be cancelled

  • Re-pay of the deposits has not been made
  • Minimum net owned fund of INR 2Crores has not been fulfilled by 31-03-2017
  • Interest of Public at Large is not made by the NBFC operations
  • Provisions of the Act has been violated
  • Filing of the Annual / Quarterly returns to RBI has not been made
  • Situations under which they have failed to Apply for C-KYC, and Membership of CIC
  • Prohibitory orders of RBI is ignored
  • NBFC Activity is not carried or working on papers with No Actual borrowers

What are the circumstances under which Writ petition should be referred to High Court?

  • Net owned fund of Rs 2 Cr has been full filled after 31-03-2017 but before 31-03-2018
  • The company has been given the right of an opportunity of being heard
  • When the show cause notice is issued by the RBI and reply on time seeking extension has submitted well on time

Appeal against cancellation of NBFC License can be filed to:

  • Appellate authority “Department of financial services is the authority to whom appeal can be filed under  sub-section (7) of Section 45-IA of the Reserve Bank of India Act, 1934 “ (Time limit to file an appeal is 30 days from the receipt of order)
  • Whereas the Write Petition Article under 226 can be filled before the high courts 

The six steps to be followed in the preparation of an Appeal against NBFC License Cancellation are:

  • ROC Compliance must be checked twice
  • RBI Returns (NBS-9) must be checked
  • Reports related to tax audits
  • Quality test of Assets and Liability must be done
  • Minimum requirement of Net Owned Fund of INR 2 Crores must be fulfilled.
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