Is RBI bound to cancel registration of NBFCs that violate terms of certificate of registration? Kerala High Court answers
The Kerala High Court has ruled that the Reserve Bank of India (RBI) is not bound to cancel the registration granted to a Non-Banking Finance Company (NBFC) for failing to adhere to the conditions mandated by their certificate of registration (Sreekala Anil v. Secretary of Finance).
A Bench of Justice N Nagaresh held that the RBI is empowered to give opportunity to the concerned NBFC to take corrective steps to bring it in compliance with the registration conditions and no petitioner can compel the RBI to cancel the registration granted to NBFC. The Court was hearing a petition moved by one Sreekala Anil against NBFC, Manappuram Finance, seeking the withdrawal of its registration.