The Reserve Bank of India (RBI) on Wednesday said that it had cancelled the Certificate of Registration (CoR) issued to the following five non-banking financial companies (NBFCs) due to irregular lending practices. These NBFCs are: UMB Securities, Anashri Finvest, Chadha Finance, Alexcy Tracon and Jhuria Financial Services.  

The central bank added that above companies should not transact the business of a non-banking financial institution (NBFI), as defined in clause (a) of Section 45-I of the RBI Act, 1934. 

Elaborating further, the RBI said that the CoR of NBFCs had been cancelled on account of violation of RBI guidelines on outsourcing and Fair Practices Code in their digital lending operations undertaken through third-party apps which was considered detrimental to public interest. 

“These companies were also not complying with the extant regulations pertaining to charging of excessive interest and had resorted to undue harassment of customers for loan recovery purposes,” it added. 

Last month, the RBI had also informed that 22 NBFCs, including BNP Paribas India Finance, Swiss Leasing and Finance and Available Finance, had surrendered their registration certificates. The central bank had cancelled their CoRs as they had surrendered them.