The Reserve Bank of India (RBI) cancelled the Certificates of Registration (CoR) of 35 Non-Banking Financial Companies (NBFCs) effective between December 9 and December 31, 2025, as part of its intensified drive to tighten oversight of the shadow banking sector. The action was disclosed in an official RBI press release issued on January 7, 2026.
NBFCs are financial entities that provide banking-like services — credit, investment, asset financing — but are not licensed as banks and hence operate outside the purview of certain banking regulations. However, they are required to hold a valid Certificate of Registration from the RBI under the Reserve Bank of India Act, 1934, to legally conduct NBFC business.
Among the 35 NBFCs whose CoR was cancelled, 16 had voluntarily surrendered their certificates, indicating proactive compliance or business wind-down. The remaining companies had their registrations revoked by RBI for reasons including failure to comply with regulatory requirements such as maintenance of minimum Net Owned Fund (NOF), submission of audited financials, and adherence to fair practices code.
Geographically, the cancellations are concentrated in the Delhi/NCR region, reflecting the dense presence of smaller, informal finance companies in the National Capital Region. The RBI's action is part of a broader regulatory tightening following concerns about predatory lending, mis-selling, and insufficient capital buffers in the NBFC sector.
This development is significant for RPSC aspirants studying economy and banking sector regulation. The RBI's move underscores the importance of shadow banking oversight, the distinction between banks and NBFCs, and the regulatory powers vested in the RBI under the RBI Act.