Section 45MBA of RBI Act : Section 45Mba: Resolution Of Non-Banking Financial Company

Explanation using Example

Imagine a scenario where "Fast Finance Pvt. Ltd." is a non-banking financial company (NBFC) that has been facing severe financial difficulties. The Reserve Bank of India (RBI), upon inspecting the company's books, determines that the continued operation of Fast Finance is critical for the financial stability of the system, particularly because it provides essential credit services to small businesses.

To address the situation, the RBI decides to invoke Section 45MBA of the RBI Act. The RBI develops a scheme for the resolution of Fast Finance, which includes:

• The amalgamation of Fast Finance with a more stable financial institution to ensure that its critical services continue uninterrupted.
• The re...

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