RBI cautions depositors against Sahara group firms

The Reserve Bank of India has warned investors against putting money in Sahara group companies’ deposits. In a public notice, the central bank said it had got complaints from “some individuals” that the Sahara group have been mobilising deposits from the public under the generic name of Sahara Pariwar and Sahara India Pariwar.

RBI cautioned citizens to verify a company’s name before investing in it. “The Reserve Bank does not guarantee the repayment of deposits accepted by SIFCL or any other company in that group,” said the notice.

The regulator clarified that only three companies in the Sahara group were registered with it – Sahara India Financial Corporation (SIFCL), Sahara India Corp Investment (SICIL) and Sahara India Infrastructure Development (SIIDL). Among these companies, RBI has not authorised SICIL and SIIDL to accept deposits from the public. And, it had directed SIFCL, a residuary non-banking company, on June 17, 2008, to phase out acceptance of deposits from the public. This company has been directed not to accept any new deposits maturing beyond June 30, 2011. The company cannot even renew any deposits beyond this date. This notice comes after a similar warning from Securities and Exchange Board of India (Sebi), against the group entities.

In November, Sebi had banned several Sahara group entities from raising money from the public, for allegedly violating public issue norms. However, the Allahabad high court stayed the order last month.