Normalcy returns to Sahara HQ

SIFCL branches witnessed normal flow of customers and transacted business as usual.

A manager of a city area branch said that since the apex court had "not revoked the stay" granted by the Lucknow bench of the Allahabad High Court, the stand of the company stood vindicated.

"We are getting requests for new deposit accounts and there is no fear among our customers about repayments, which has been in the business for over 20 years," he added.

A Supreme Court bench headed by justice Arijit Pasayat has directed that the designated RBI authority shall hear all concerned parties and pass a fresh order on June 12.

The order was passed on the appeal of the apex bank against the HC order passed last week. On June 4, the regulator had prohibited the NBFC from accepting fresh deposits. The following day, the Sahara Group secured a stay.

Meanwhile, K K Lahiri, counsel for the Sahara Group, said the RBI order of June 4 had "aggrieved" his client and the SC had set it aside.

"The SC observation is a guideline for all public institutions not to cross limits and be fair and judicious while dealing with such cases," he added.

"RBI has overstepped its limit in this instance. The regulator has now been asked by the SC to step into the shoes of a judge and hear us out over the charges levelled by it," he underscored.

The 29-odd branches of the company in the Lucknow region functioned normally with no visible sign of panic either among its staff members or depositors.

The company maintains it is meeting all maturity commitments. Some customers were seen drafting applications for the withdrawal of money on maturity today.

Another Sahara Group company, Sahara India Real Estate Corporation, also functioned as usual.

A lady depositor admitted that although she was a little apprehensive in the wake of the RBI ban, she had full faith in the company and its repayment capability.

"We are following all know-your-customer (KYC) norms and there is nothing to worry for us," manager of another branch maintained. NIFCL has around 1,800 branches across the country with six lakh agents.

The Uttar Pradesh government has already written a letter to RBI declaring that the bank was "the competent authority to take final decision in the matter as it is alone in the know of full and complete facts, circumstances and documents which has resulted in the passing of the said order."

RBI maintained that its action followed a show-cause notice issued to SIFCL as it "continuously violated" the requisite directions and guidelines.