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RBI warns investors against Sahara India Pariwar deposits

RBI warns investors against Sahara India Pariwar deposits
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First Published: Tue, Jan 18 2011. 11 18 AM IST
New Delhi: The Reserve Bank of India (RBI) has issued a public notice warning investors against money collected in the name of Sahara pariwar/Sahara India Pariwar. In a public advisory issued on Tuesday, the central bank said, “Members of the public are… cautioned that when money is collected in the name of ‘Sahara pariwar/ Sahara india Pariwar’, they should verify the name of the company which issues the deposit receipt and whether the said company is authorised by the Reserve Bank to accept deposits from the public.”
The central bank’s notice comes 10 days after a similar public warning given by capital market regulator Securities and Exchange Board of India (Sebi) against the group entities.
On 24 November, Sebi banned several Sahara group entities from raising money from the public for allegedly violating public issue norms. Subsequently, on 13 December, the Lucknow bench of the Allahabad high court stayed the Sebi order pending investigation.
Last week, the high court decided to hear the case on a daily basis beginning 27 January.
The central bank also cautioned that it would not guarantee the repayment of deposits accepted by “Sahara India Financial Corporation Limited or any other company in that group.”
The public notice comes after RBI received complaints from individuals that the Sahara group is mobilizing money from the public under the generic name of Sahara Pariwar and Sahara India Pariwar.
“There appears to be a misconception in the minds of public that the Reserve Bank is the regulator of entire Sahara group of companies, leading to mistaken comfort in its deposit offers,” the RBI notice said.
Only three Sahara group entities are registered with RBI -- Sahara India Financial Corp. Ltd (SIFCL), Sahara India Corp Investment Ltd (SICIL) and Sahara India Infrastructural Development Ltd. (SIIDL)
Of these three entities, SIFCL, a residual non-banking company, has been directed by RBI to phase out acceptance of deposits from the public. SICIL and SIIDL are not authorized to accept deposits from the public.
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First Published: Tue, Jan 18 2011. 11 18 AM IST