RBI Cancels Registration of 35 NBFCs — A Comprehensive Overview

In a significant regulatory update that reverberated across India’s financial sector, the Reserve Bank of India (RBI) cancelled the Certificates of Registration (CoR) of 35 Non-Banking Financial Companies (NBFCs) during December 2025. This action, executed under the statutory powers vested in the RBI by Section 45-IA (6) of the Reserve Bank of India Act, 1934, bars these entities from undertaking any regulated non-banking financial activities going forward.

NBFCs have long been an integral component of India’s credit ecosystem. They provide credit, financing, and investment services across commercial, retail, housing, and microfinance segments. Unlike banks, NBFCs do not hold a banking license yet play a critical role in plugging credit gaps — especially for underserved segments, small businesses, and individual borrowers. However, their operations are subject to stringent regulatory oversight by the RBI to safeguard financial stability, protect depositors (where applicable), and ensure prudent risk management.

The Regulatory Basis: Section 45-IA of the RBI Act

Under Section 45-IA(6) of the RBI Act, the central bank is empowered to cancel the registration of a financial entity if it “no longer satisfies the conditions” for registration or if it is not operating in accordance with the regulatory framework. The cancellation of registration effectively strips the NBFC of the ability to conduct financial services as defined under the Act — including lending, investment facilitation, or acceptance of funds in the course of business.

According to official sources, the RBI issued multiple cancellation orders across December 09, 19, 23, and 31, 2025, reflecting a staggered but decisive supervisory action aimed at reinforcing compliance.

The 35 NBFCs Affected

The RBI’s action affected a diverse list of 35 NBFCs, many of which operate in smaller lending, leasing, brokerage, or investment niches. These include:

  1. Satya Prakash Capital Investment Limited
  2. A G Securities Private Limited
  3. ALB Leasing & Finance Ltd.
  4. ATM Credit & Investments Pvt. Ltd.
  5. Corporate Capital Services India Private Limited
  6. Decisive Finance Private Limited
  7. Divine Investments Private Limited
  8. Liberty Sales Pvt. Ltd.
  9. Pearls Hire Purchase Corporation Limited
  10. Quasar India Fincap Private Limited
  11. Sunlife Securities Private Limited
  12. Sunrise Manufacturing Co Ltd
  13. Swito Finance & Estates Private Limited
  14. Triveni Vinimay Private Limited
  15. Twenty First Century Marketing Ltd
  16. Unitron Finlease Limited
  17. Veera Securities and Finlease Private Limited
  18. Vini Financial and Management Consultants Private Limited
  19. Shivom Investment & Consultancy Limited
  20. Adhinath Investments Private Limited
  21. Agroha Savings Limited
  22. Ahusons Finance and Investments Private Ltd
  23. Altar Investment Pvt Ltd
  24. Associated Leasing Limited
  25. Atlantic Leasing Limited
  26. B H L Forex and Finlease Limited
  27. Bharatpuria Finance and Investment Limited
  28. Dada Dev Finance & Leasing Pvt. Ltd.
  29. East Delhi Leasing Private Limited
  30. Economic Capital Services India Private Limited
  31. ESN Finance and Capital Services Limited
  32. FMI Investments Private Limited
  33. Ganpati Fincap Services Private Limited
  34. Goodworth Securities Private Limited
  35. Gopal Overseas Private Limited

This extensive list highlights the breadth of the RBI’s supervisory coverage across geographically diverse markets and business models — a reminder that regulatory compliance is non-negotiable irrespective of an NBFC’s size or segment.

Why the RBI Took Action

Although the RBI did not publicly elaborate on the individual circumstances for each cancellation, regulatory practice and past press releases indicate several possible triggers for deregistration:

  • Failure to Meet Regulatory Conditions: NBFCs must maintain minimum Net Owned Funds (NOF), adhere to reporting norms, and ensure transparency in financials. Failure on these fronts can jeopardize ongoing registration.
  • Non-Compliance with Regulatory Reporting: Regular filings, disclosures, and compliance with risk management standards are prerequisites to retain the Certificate of Registration.
  • Dormant or Non-Operational Entities: Companies that have ceased active operations or failed to conduct meaningful financial business may also lose registration.
  • Regulatory Risk to the Public: In some cases, weak governance or potential consumer risk could lead to cancellation to safeguard public interest.

It is important to note that the cancellations were not isolated: separate RBI actions in recent months and years have also involved deregistration of NBFCs that voluntarily surrendered registration, ceased to exist due to mergers, or were reclassified under different regulatory regimes.

Implications for the Companies and the Sector

The immediate consequence of deregistration is clear: the 35 NBFCs listed are now officially barred from carrying on any financial business as per the RBI’s statutory definition. This includes:

  • Lending to individuals or corporations
  • Accepting funds (deposit or otherwise)
  • Facilitating investment services
  • Operating credit intermediation

Any continuation of such activities post-cancellation could attract legal consequences, including prosecution under the RBI Act and other relevant statutes.

For the broader NBFC sector, this move signals the RBI’s continued emphasis on a robust regulatory environment. Investors, creditors, and stakeholders of NBFCs will need to pay heightened attention to compliance standings, governance structures, and timely reporting. The deregistration also reinforces the need for NBFCs to align with evolving regulatory expectations — especially amid the backdrop of market volatility and credit concerns nationally.

What This Means for Borrowers and Investors

For customers who have availed loans from these companies, the RBI’s deregistration does not automatically void outstanding contracts. However, borrowers should exercise caution and seek clarity on the servicing of their loans — especially if the NBFC is unable to legally continue normal operations. Investors, on the other hand, must reassess positions in NBFCs with weak compliance records or uncertain regulatory status.

A Message on Regulatory Vigilance

The cancellation also serves as a broader lesson about the role of regulatory oversight in maintaining financial system integrity. As NBFCs continue to grow their footprint in credit markets, the RBI’s supervisory actions help ensure that only entities adhering to prudent financial practices remain in operation. This protects not just wholesale creditors but also retail borrowers and the credibility of India’s financial ecosystem as a whole.

Conclusion

The RBI’s cancellation of registration for 35 NBFCs in December 2025 is a clear demonstration of rigorous regulatory enforcement under the RBI Act. By exercising its statutory powers, the central bank has reaffirmed its commitment to compliance, discipline, and structural soundness in the non-banking financial sector. While the affected companies now face legal limitations on their operations, this step also strengthens fiduciary confidence and signals the importance of ongoing regulatory adherence for all financial entities operating in India.

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