The Reserve Bank of India (RBI) has canceled the registration of UP’s Margdarshak Financial Services Limited. This registration has been canceled due to non-performing assets (NPAs) and default in repayment to lenders.
Cancelling the registration certificate, RBI said that as of March 31, 2021, the company failed to maintain the minimum regulatory net owned fund of Rs 5 crore and minimum capital adequacy ratio (CAR) of 15 percent prescribed for NBFC-MFIs. Let us tell you that as of March 31, 2021, Margdarshak Financial Services Limited was facing cash flow issues and was defaulting on repayment of Rs 49.27 crore to its lenders.
Difficulty in keeping business going
According to the Central Reserve Bank, the auditor found that there is uncertainty due to the loss (Rs 187 crore) and high net NPA (Rs 82.37 crore), which casts doubt on the company’s ability to continue its business. Apart from this, there was a delay in finalizing the company’s accounts for the financial year 2020-21. It was finalized on October 22, 2021, after about seven months.
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RBI action on these 2 companies
Meanwhile, the Reserve Bank has imposed fines on NDX P2P Private Limited and Innofin Solutions Private Limited for non-compliance with certain provisions of ‘peer-to-peer lending platform’ and guidelines on digital lending. Innofin has been fined Rs 1.99 crore. NDX P2P Private Limited has been fined Rs 1.92 crore.
RBI action
Let us tell you that RBI is very strict about the rules. In this connection, RBI recently imposed fines on five units including CSB Bank, Union Bank of India and Muthoot Housing Finance. This fine has been imposed due to violation of different regulatory norms. RBI said that in every case the fine is based on deficiencies in regulatory compliance and is not related to the financial transactions of these units.
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