The Reserve Bank of India (RBI) has canceled the Certificate of Registration (CoR) of M/s Margdarshak Financial Services Limited, meaning that the company is no longer allowed to operate as a Non-Banking Financial Company (NBFC). This decision was made under Section 45-IA (6) of the Reserve Bank of India Act, 1934.
The RBI’s action was based on several issues:
1. According to the company’s Statutory Audit for March 31, 2021, M/s Margdarshak Financial Services Limited was experiencing cash flow problems and had defaulted on repaying ₹49.27 crore to its lenders. The audit also highlighted that the company had significant losses (₹187 crore) and high non-performing assets (₹82.37 crore), raising serious doubts about its ability to continue operating.
2. By March 31, 2021, the company did not meet the minimum regulatory net owned funds (NOF) requirement of ₹5 crore and the minimum Capital Adequacy Ratio of 15% required for NBFC-MFIs.
3. There was a significant delay in finalizing the balance sheet for the year ending March 31, 2021; it was completed nearly 7 months late, on October 22, 2021.
4. The company also had considerable delays in submitting required supervisory returns.
5. The company had net cumulative negative mismatches in the maturity buckets of 1-30 days, exceeding the allowed limits.
6. The company failed to provide the information requested by the RBI, refused to cooperate, and did not produce its books of accounts.
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