shantanu 12 July 2017

Registration withdrawn

can a NBFC initially registered with National housing bank collect interest from the loan which become NPA in 2004 at contractual rate of 19 % per annum TILL 2017, after its registration was cancelled by NHB IN 2008.

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12 Replies

P. Venu (Advocate) 12 July 2017

The material facts are yet to be posted.

G.L.N. Prasad (Retired employee.) 12 July 2017

The Registration cancellation applies to further lending, and for what all was lent by NBFC, they have repay the same to NHB. Neither Bank nor NBFC lends their own amount but first advances the amount, and gets refinance from NHB, which they have to repay to NHB, irrespective of whether the borrower repay the amount or not to the Bank/NBFC. Read the conditions of such registration cancellation, it only states that it should not lend further or not eligible for refinance, as NHB eiher might have observed serious violations like lending without following the norms, or failure in repayment of earlier loans by NBFC.

Why the borrower is concerned with NBFC registration cancellation by NHB, when he borrowed from NBFC and when it is still functioning, cancellation of registration is temporary or permanent is also to be seen. ?

Borrower can write a letter to NHB and seek such information as repayment can be made now to NBFC as they are demanding now, even after cancellation of such approval from NHB.