Mumbai, Aug 9 (KNN) The Reserve Bank of India (RBI) on Wednesday cancelled the licences if as many as 36 Non-Banking Financial Companies (NBFCs). The total number of NBFCs whose licences have been cancelled has crossed 450 so far in this year.

In a statement issued by the RBI, the central bank said these companies will not be able to do the business of a non-banking financial institution from now on. 

The central bank has cancelled the licences of over 100 NBFCs this month alone. Some of them were either blacklisted or they stopped doing operations and surrendered their certificates to the RBI.

Till June this year RBI had cancelled licences of 368 NBFCs, more than double the number of such cancellations in the whole of 2017, for failing to meet regulatory norms.

According to banking and finance experts, the move is being seen as an attempt to clean up the sector, which has more than 11,402 entities, of which 222 are non-deposit taking NBFCs.

According to the amendment in the RBI Act of 1997, the central bank had mandated the minimum capital requirement for NBFCs at Rs 25 lakh which was later increased to Rs 2 crore for new NBFCs.

RBI had set a deadline for all NBFCs to reach the minimum net owned fund of Rs 2 crore before 31 March 2017.

Under the PMLA, the NBFCs, which include cooperative banks, are required to furnish details about the identity of their clients, maintain records and furnish the information to the Financial Intelligence Unit. 

According to a report by ICRA, several NBFCs are facing closure for violation of these rules, but despite that these non-banking financial institutions are expected to grow at 19-21 per cent in the current financial year, while SME credit could see over 25 per cent growth.