Lok Sabha Question No. 3353 (UNSTARRED), answered on 2024-12-16
Subject: Withdrawal of Licences of NBFCs by RBI
Ministry: FINANCE
Asked by: Shri S Venkatesan

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 3353

ANSWERED ON MONDAY, 16 th  DECEMBER, 2024/ AGRAHAYANA 25, 1946 (SAKA)

## WITHDRAWAL OF LICENCES OF NBFCs BY RBI

## 3353.  SHRI S VENKATESAN:

Will the Minister of FINANCE be pleased to state:

- (a) the reasons for deposits of Non-Banking Finance Companies (NBFCs) not covered by the Deposit Insurance Credit Guarantee Corporation (DICGC);
- (b) the number of licences of NBFCs that have been withdrawn by Reserve Bank of India during the last ten years along with the reasons therefor;
- (c) the total number of NBFCs which are deposit taking NBFCs;
- (d) the total money lost by the public due to bankruptcy of NBFCs; and
- (e) whether  many  borrowers  of  the  NBFCs  are  harassed  by  the  recovery  agents  of NBFCs and if so, the steps taken by the Government and RBI to prevent the same?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

(a): The  Deposit  Insurance  Credit  Guarantee  Corporation  (DICGC)  is  governed  by  'The Deposit Insurance and Credit Guarantee Corporation Act, 1961'. The DICGC protects the deposits of insured banks in terms of section 2(i) of the DICGC Act, 1961. The insured banks are  the  banks  registered  with  the  DICGC,  which  include  commercial  banks  {public  sector banks,  private  sector  banks,  foreign  banks,  small  finance  banks,  payment  banks,  regional rural  banks,  and  local  area  banks}  and  co-operative  banks  {primary  (urban)  co-operative banks, state co-operative banks, and district central co-operative banks}.

(b): As  on  30.06.2024,  There  are  5728  Non-Banking  Finance  Companies  (NBFCs)  and Asset Reconstruction Companies (ARCs) whose Certificate of Registration (CoR) has been cancelled by Reserve Bank of India (RBI).

(c): As on 30.06.2024, 25 Deposits taking NBFCs are registered with RBI.

(d) and (e): Complaints received regarding harassment of borrowers by recovery agents are taken up with the Supervised Entities (SEs) for immediate action by RBI. RBI has also issued the  circular  on  'Guidelines  on  Fair  Practices  Code  for  Lenders'  dated  05.05.2003.  The guidelines provide for informing borrowers of comprehensive information about the fees/charges,  etc.  Moreover,  the  guidelines  direct  lenders  to  release  all  securities  on receiving  payment  of  loan  or  realisation  of  loan  and  non-interference  in  the  affairs  of  the borrowers by lenders. For recovery of loans, the guidelines prescribe that the lenders should not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc

Further, compliance to RBI guidelines issued to Regulated Entities (REs) is examined during their Supervisory Assessment and any non-compliance observed is taken up with the REs for the rectification apart from initiating supervisory/ enforcement action against the REs, as per regulations and law.