RBI, Sahara meet on deposit ban today

On the directions of the Supreme Court, the Sahara India Financial Corporation (SIFC) will again present its case to the Reserve Bank of India (RBI) to be allowed to raise public deposits. SIFC is the para-banking unit of Sahara Group.
The RBI had barred SIFC, on June 4, from accepting public deposits. Sahara subsequently approached the Allahabad High Court and obtained a stay order against RBI’s directive. On June 6, the RBI moved the Supreme Court through a special leave petition praying that the stay granted by the Allahabad High Court be lifted.
The Supreme Court set aside the order dated June 4, with a direction to the central bank to hear SIFCL afresh on the merits of its reply to RBI’s showcause notice of May 9, and accordingly pass a fresh order. According to Sahara, the court order has brought the situation back to June 2, except that now the Reserve Bank of India would have to hear the matter on June 12 before issuing a fresh order.
The RBI said SIFCL had continuously violated directions on maintenance of directed investments, payment of minimum rate of interest, anti-money laundering guidelines, KYC norms stipulated for opening of deposit accounts, details on the company agents deployed for deposit mobilisation and intimating depositors about the time of maturity and repayment of deposits.
BS Reporter / Mumbai June 12, 2008, 3:50 IST


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