RBI Cancels Registration Of Kerala-Based Pooram Finserv
The Reserve Bank of India, on Wednesday, has cancelled certificate of registration of Pooram Finserv Private, thereby prohibiting Poonam Finserv from engaging in the operations of a Non-Banking Financial Company (NBFC).
This move was executed by the RBI in accordance with the powers vested in it under Section 45-IA (6) of the Reserve Bank of India Act, 1934. Consequently, the Poonam Finserv firm based in Kerala is barred from conducting the activities of a Non-Banking Financial Institution, as outlined in clause (a) of Section 45-I of the RBI Act, 1934.
Earlier in February 2022 also Reserve Bank of India (RBI) had imposed a monetary penalty of ₹10 lakh on Pooram Finserv in Kerala's Thrissur for non-adherence with certain provisions.
The central while imposing the penalty in the year 2022 stated that Pooram Finserv, Thrissur, Kerala has failed to adhere to specific provisions outlined in the RBI Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016, and the RBI Direction on Raising Money Through Private Placement of Non-Convertible Debentures (NCDs) by NBFCs dated February 20, 2015.
It was stated that the scrutiny of the operations of Pooram Finserv, Thrissur, Kerala, took place in January 2019. The Scrutiny Report, among other findings, disclosed non-compliance with the aforementioned directions issued by the RBI. Additionally, it was mentioned that a notice had been issued to the company, advising it to provide reasons as to why a penalty should not be imposed for its failure to adhere to the RBI's directives.
Following an assessment of the company's response to the notice and a review of any additional submissions it provided, the RBI reached the determination that the allegation of non-compliance with the aforementioned RBI directives was well-founded and justified the imposition of a monetary penalty. While the RBI had previously stated the grounds for imposing a monetary penalty, on this occasion, when cancelling the Certificate of Registration, the RBI did not provide any specific reasons.
