Sahara objects to RBI ad on deposits

The Sahara group has taken umbrage over a Reserve Bank of India advertisement, issued earlier this week, cautioning deposit holders to be cautious about deposits raised by the Sahara India Pariwar and has challenged the central bank’s jurisdiction in doing so. Sahara Pariwar, in a letter to the RBI, has said that there are a host of companies in the group which are raising funds and come under purview of other regulators, which are not governed by the RBI. These companies include Sahara India Life Insurance, Sahara Asset Management, Sahara Real Estate Corporation and Sahara Housing Investment Corporation. Challenging the banking regulator, Sahara, said that Sahara Real Estate Corporation and Sahara Housing Investment Corporation are issuing optionally fully convertible debentures and these investments do not come under the RBI’s purview. Similarly, it also pointed out that the Sahara Credit Cooperative Society is promoting micro savings for micro lending, which also does not come under RBI regulations. The RBI on January 18 had issued advertisement in leading newspapers stating that it had received complaints that Sahara group of companies has been mobilizing deposits from the public under the generic name of Sahara Pariwar. The central bank had cautioned the public stating that when money is collected in the name of Sahara Pariwar they should verify the name of the company which issues the deposit receipt and whether the company is authorized by the RBI to accept deposits from the public. They were also cautioned that the RBI does not guarantee repayment of deposits accepted by Sahara India Financial Corporation (SIFCL) or any other company in the group.