RBI moves SC against stay on Sahara order
07 Jun 2008
Mumbai: The Reserve Bank of India has moved the Supreme Court challenging a stay granted by the Allahabad High Court on its order banning Sahara Group's residuary non-banking finance company (NBFC) from accepting fresh deposits.
A vacation bench headed by Justice Arijit Pasayat, which allowed RBI to file a special leave petition against the high court order, fixed 9 June as the date for hearing the matter.
Senior advocate P R Andhyrujina filed the petition later in the day.
The bench also permitted Sahara India Financial Corporation`s counsel Mukul Rohtagi to file a caveat. The caveat will allow Sahara's arguments to be heard when the Supreme Court takes up the RBI's appeal and ensure that no ex-parte order is passed against the company, sources said.
The RBI had prohibited SIFCL from accepting any deposits in any manner, citing violation of various regulatory norms, including non-payment of minimum rate of interests as prescribed, non-maintenance of stipulated asset-liability match and not informing depositors in time about the maturity of their deposits.
In its Wednesday order, RBI had asked the company to freeze its deposits and repay the existing deposits as and when they mature.
The Lucknow bench of the Allahabad High Court yesterday stayed the RBI ban, following a plea by SIFCL`s executive director O P Srivastava.
The Sahara Group said after it got the stay, its RNBC arm continued to do ''normal business''. SIFCL, the sources said, had also continued to accept deposits from investors after the stay.
Set up in 1987, SIFCL has a current deposit base of about Rs18,000 crore with a depositor base of 4.25 crore. The Sahara group has interests in mutual funds, insurance, real estate and media.
