The Reserve bank of India (RBI) today decided against the renewal of Ceat Financial Services Ltd's (CFSL) primary dealership (PD) licence. With this, CFSL ceases to be a primary dealer with immediate effect.
According company sources, CFSL had received the shareholders' approval for transferring its non-banking finance company licence to the primary dealership business, which was to be hived off as a separate entity. They added that the company was awaiting the regulators response to its application in this regard.
CFSL was in the process of subsidiarising its PD business in line with regulatory norms and was also scouting for a joint venture partner to whom it was willing to cede up to 49 per cent stake. It was in talks with a couple of public sector banks for participating in the business as a joint venture partner.
The company, which has totted up accumulated losses of Rs 139.35 crore, has stopped lending operations (both lease and hire purchase) and is concentrating on paying off outstanding fixed deposits of Rs 120 crore over the next four years as per the schedule outlined by the Company Law Board last year.
