RBI sets up panel to review working of ARCs
RBI sets up panel to review working of ARCs

Prior to cancelling the license, the banking regulator, Reserve Bank of India has issued a show cause notice to Sambandh Finserve, stated a report. This was mainly due to the erosion in net worth below the regulatory limit.

According to Moneycontrol, “A show cause notice has been issued to Sambandh Finserve asking why its licence should not be cancelled due to sharp deterioration in its net worth,” said one of the persons quoted above. In addition, the report stated that the process to suspend their licenses have commenced.

Meanwhile, Deepak Kindo, Managing Director and CEO of Sambandh has been arrested by Economic Offence Wing, Chennai, for alleged fraud.

Sambandh is registered as an NBFC-MFI. According to the RBI norms, NBFC is required to maintain a minimum capital level consisting of Tier-I and Tier-II capital, of not less than 15 per cent of their aggregate risk-weighted assets. However, the institution is unable to maintain that levels which is why RBI has issued the notice.

At the end of March 2020, SFPL has total reported assets under management of Rs 461 crore and has a profit after tax of Rs 5.22 crore.

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