In the latest development RBI cancels NBFC registration post-merger. L&T Finance, L&T Infra Credit, along with five other non-banking financial companies (NBFCs), have voluntarily given their certificates of registration to the Reserve Bank of India (RBI). Consequently, the central bank has revoked their Certificate of Registration (CoR) as they stopped to maintain legal status post-amalgamation, merger, dissolution, or voluntary strike-off.
Last December, L&T Finance Holdings (LTFH) announced the successful completion of the merger procedure involving its subsidiaries L&T Finance, L&T Infra Credit, and L&T Mutual Fund Trustee, consolidating them under its umbrella.
The list of NBFCs surrendering their CoR includes Marudhar Food & Credit Ltd, Creative Intra Ltd, Jinvani Trading & Investment Company, Manjushree Fincap, and Shruti Financial Services.
Furthermore, the RBI disclosed the cancellation of CoR for four additional NBFCs: Nimisha Finance India, R.M.B. Finance Company, Suyash Finovest, and Kamdhar Leasing and Finance Ltd. These companies are now restricted from conducting non-banking financial activities.
Experts opine that such regulatory actions are crucial to ensure the integrity and stability of the financial sector. This goes below the RBI’s schedule to hold compliance standards and protect the interests of stakeholders within the companies. As the scenario of financial services continues to work, regulatory oversight is paramount to keep transparency and trust among market participants.
RBI cancelling NBFC registration highlights the significance of regulatory compliance in the financial sector. It underscores the need for companies to adhere strictly to merger procedures and regulatory requirements to maintain their legal status and operational continuity.
Experts at Vakilsearch emphasise the importance of comprehensive legal due diligence during mergers and acquisitions to mitigate the risk of regulatory non-compliance and ensure seamless transitions. Additionally, this development serves as a reminder for NBFCs to prioritise regulatory compliance to safeguard their interests and maintain trust within the financial market.
Get in touch with us right now to make sure your company adheres with regulations in the ever-changing financial sector. Our team of seasoned experts focuses on company restructuring, mergers & acquisitions, and regulatory compliance. Whether you need help with merger procedures or legal advice on regulatory problems, Vakilsearch is dedicated to offering specialised solutions to match your unique requirements.
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