RBI Cancels Registration Of 35 NBFCs In Major Compliance Clean-Up Drive

In a significant regulatory action, the Reserve Bank of India has announced that it has cancelled the certificates of registration of 35 Non-Banking Financial Companies (NBFCs) for failing to comply with mandatory regulatory requirements. 

According to the official RBI communication issued on December 9, these entities are no longer permitted to carry on the business of non-banking financial institutions in India. The decision, taken under Section 45-IA(6) of the RBI Act, 1934, is part of the central bank’s continuous supervisory review of the sector, as reported by News On Air and ET Now.

The RBI has also advised the public to verify the regulatory status of any financial entity before undertaking transactions, a warning that gains importance especially at a time when RBI cancels NBFC registration of non-compliant entities with increasing frequency.

What Exactly Did RBI Announce?

As per the RBI’s press release dated December 9, the regulator concluded that these 35 companies no longer satisfied the conditions required to hold a valid Certificate of Registration. 

Once this certificate is cancelled, the company immediately loses the legal right to conduct lending, investment or any activity classified under NBFC business. This development has also been covered in detail by Moneylife and MyPunePulse.

To understand the scope of the action, the following table summarises the regulatory move.
 

The RBI made it clear that these companies have effectively ceased to exist as regulated financial institutions. This underlines how strictly the regulator is now enforcing compliance, especially as RBI cancels NBFC registration to protect the integrity of the financial system.

The Bigger Context Behind The Crackdown

Over the past few years, the RBI has been steadily tightening supervision of NBFCs following multiple governance and liquidity stress episodes in the sector. The central bank has repeatedly stated in its supervisory communications that registration is not a one-time approval but a privilege that depends on continuous compliance.

In fact, apart from cancellations, the RBI has also been accepting voluntary surrender of licences by NBFCs that are either inactive or unable to meet regulatory standards. A related trend was earlier reported by LoansJagat in a separate case involving large financial entities surrendering their NBFC licences, which can be read here: LoansJagat report.

The current action shows that the regulator is not only focused on large institutions but is also cleaning up smaller and inactive entities that remain on the register without meeting compliance norms.

What This Means For Customers And Investors

Along with cancelling these registrations, the RBI has issued a clear public advisory asking people to verify the registration status of any NBFC before dealing with it. This is crucial because once RBI cancels NBFC registration, the company is no longer authorised to accept funds, lend money or offer financial products.

The practical implications are explained below.
 

This advisory has also been highlighted in reports by Adda247 and other policy tracking platforms.

Regulatory Message And The Road Ahead

While the RBI has not disclosed detailed individual reasons for each cancellation in its public note, it has clearly stated that these companies failed to meet the conditions necessary to continue as registered NBFCs. The message is unambiguous: compliance, governance and transparency are no longer negotiable.

The December 9 action fits into the broader RBI strategy of strengthening trust in the financial system and ensuring that only well-governed entities are allowed to handle public money.

Conclusion

The latest move once again confirms that RBI cancels NBFC registration wherever regulatory standards are not met. For consumers, it is a reminder to always verify before trusting. For the industry, it is a clear signal that compliance is now the cost of survival.