RBI moves apex court against Sahara (Lead)

June 7th, 2008 - 12:47 am ICT by IANS  

New Delhi, June 6 (IANS) The Reserve Bank of India (RBI) Friday moved the Supreme Court seeking enforcement of its order to the Sahara group’s para-banking arm to stop taking fresh deposits from investors. The RBI challenged an Allahabad High Court interim ruling, which Wednesday suspended the country’s central bank’s order to Sahara India Financial Corporation Limited (SIFCL) in this regard. The RBI had prohibited SIFCL “with immediate effect from accepting any deposits in whatsoever manner including instalments under any running daily deposit or other deposits”, citing violation of norms.

India’s largest non-banking financial company, the SIFCL has over 6 million investors with an estimated sum of over Rs.200 billion deposited with it.

RBI had issued its order after inspecting books of accounts of the SIFCL in which it found irregularities and violation of RBI guidelines by the firm.

Appearing for the RBI before a vacation bench of Justice Arijit Pasayat and Justice P.P. Naolekar, senior counsel T.R. Andhyarujina sought the apex court’s intervention for enforcement of the bank’s order in the interest of investors.

The bench, agreeing to hear Monday the RBI’s appeal against the Allahabad High Court ruling, asked Andhyarujina to file the formal appeal.

The Lucknow bench of the Allahabad High Court had Wednesday suspended the RBI order on a plea by SIFCL’s Executive Director O.P. Srivastava.

Reacting to the RBI plea, Samajwadi Party general secretary Amar Singh told reporters here Friday: “Jaya Bachchan (party MP Rajya Sabha) and I have stopped being members on the board of directors since the last three years. Subroto Roy (owner Sahara group) has so many friends including Bharatiya Janata Party president Rajnath Singh and Congress leader Pramod Tiwari.”

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