RBI moves apex court to enforce order against Sahara group

June 6th, 2008 - 10:02 pm ICT by IANS  

New Delhi, June 6 (IANS) The Reserve Bank of India 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. RBI has challenged an Allahabad High Court interim ruling, which Wednesday suspended the country’s central bank’s order to Sahara India Financial Corporation limited in this regard.

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.

The RBI had Wednesday 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.

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