As many as 18 NBFCs close down this week

Mumbai, May 10 (KNN) As many as 18 Non-Banking Financial Companies (NBFCs) have closed this week with the Reserve Bank of India (RBI) blacklisting 5 of them and 13 NBFCs surrendering their certificates themselves.

The NBFCs whose certificates have been cancelled by RBI are - Jagannatha Financial Services Limited, SCF Finance Limited, Mansar Finance Limited, Kailash Ficom Limited
(presently known as Mindvision Capital Limited) and Goswamis Credits & Investment Private Limited
(presently known as Goswamis Credits & Investment Ltd).

The NBFCs to surrender their certificates are - Ruby Mercantile Company Pvt. Limited, Adesh Investment & Trading Co. Pvt. Ltd. Boras Investment & Trading Co. Pvt. Ltd., Enakshi Investments Pvt. Ltd., Kent Investments Pvt. Ltd., Pioneer Mercantile India (P) Ltd etc.

RBI said these companies shall not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act, 1934.

According to a study report on NBFCs, in the last five years, non-banking financial companies (NBFCs) have witnessed a sharp 5% increase in their non-performing assets (NPAs) and the “static mood” of the realty sector is likely to further increase NPAs of the NBFCs.

The study was conducted by RBI.

A NBFC is a company incorporated under the Companies Act 2013 or 1956 and engaged in the business of loans and advances, acquisition of stocks, equities, debt etc, issued by the government or any local authority.

According to the RBI study on NBFCs, the bad loans of NBFCs work out to be around Rs 74,230 crore. However, the RBI study also attributes the change in NPA recognition norms as a reason for growing NPAs of NBFCs. (KNN Bureau)