Swastik Safe Deposit & Investments Limited Surrenders NBFC License, RBI Cancels Registration

Swastik Safe Deposit & Investments Limited , a Mumbai-based company, has voluntarily surrendered its Non-Banking Financial Company (NBFC) license, leading to the cancellation of its Certificate of Registration (CoR) by the Reserve Bank of India (RBI). This significant development marks a pivotal shift in the company's business strategy and operational focus.

Key Details of the License Cancellation

• Effective Date: The RBI has cancelled Swastik Safe Deposit & Investments Limited's NBFC registration effective July 24, 2023.
• Original Registration: The company's NBFC license was initially issued on March 24, 1998, with the CoR number 13.00535.
• Voluntary Surrender: The cancellation comes following the company's voluntary application to surrender its NBFC status.
• Cessation of NBFI Activities: The company had already stopped its Non-Banking Financial Institution (NBFI) activities from August 8, 2022.

Reasons for Surrender

The primary reason for Swastik Safe Deposit & Investments Limited's decision to surrender its NBFC license was its inability to meet the Principal Business Criteria (PBC) set by the RBI. As of March 31, 2023:

• The company's financial income was less than 50% of its gross income.
• Financial Assets to Total Assets ratio stood at 97.19%.
• Financial Income to Gross Income ratio was at 28.74%.

These figures indicate that the company no longer met the RBI's requirements for maintaining NBFC status.

Future Plans and Regulatory Compliance

Following the cancellation of its NBFC license, Swastik Safe Deposit & Investments Limited has outlined several steps for its future operations:

1. Business Transition: The company plans to shift its focus to investing in non-financial assets and trading activities.
2. New Registration: It intends to register as a stockbroker, marking a significant change in its business model.
3. Name Change: As per RBI instructions, the company is required to change its name within 30 days to reflect its non-NBFC status.
4. Regulatory Reporting: The company will continue to report credit information to credit bureaus as instructed by the RBI.
5. Memorandum Amendment: Within 30 days of the CoR cancellation, the company will amend its Memorandum of Association to remove clauses related to financial business from its main objects.

Implications and Compliance Measures

The RBI has emphasized that Swastik Safe Deposit & Investments Limited can no longer transact business as an NBFI without obtaining a fresh CoR. The company has been reminded of the penal provisions in the RBI Act for any violations.

This move by Swastik Safe Deposit & Investments Limited represents a strategic shift in its business model, moving away from financial services to focus on other investment and trading activities. The company's compliance with RBI directives and its plans for future operations will be crucial in shaping its new business direction.

Investors and stakeholders of Swastik Safe Deposit & Investments Limited should closely monitor these developments as the company transitions into its new operational framework.