HC stays RBI's order against SIFCL functioning

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Lucknow, Jun 5 (UNI) A Lucknow bench of Allahabad High Court today stayed the Reserve Bank of India's (RBI) order of barring the Sahara India Financial Corporation Limited (SIFCL) from raising fresh money from the public.

A bench comprising justices Uday Krishan Dhawan and Sabihul Hasnain pronounced this decision on SIFCL's petition.

In the petition, the SIFCL had challenged the RBI's directions and alleged it of not being legally sound.

Yesterday, the central bank had not only banned the fresh deposit but also asked Sahara India Finance to lodge all securities held in its custody with a designated bank saying the decision was taken in public interest and to protect the interests of the depositors.

In its response, Sahara India Finance, the Lucknow-based residuary non-banking company, one of the country's biggest deposit-taking NBFCs, has termed the RBI order as ''legally unsound, wanting in prudence and application of mind'' and submitted a petition in the high court.

Sahara India Finance also added that depositors would be paid as and when their deposits mature.

In wake of RBI's orders, Uttar Pradesh government also today directed all the districts to maintain law and order in case of any violent protest by the depositors A radiogram sent to all the DMs, SPs , DIGs and IGs directed them to ensure adequate security at and around RBI office premises, the local and branch offices of SIFCL and also other premises of Sahara India including Sahara Mall at Lucknow, Sahara City etc and residential premises of key officials of the company.

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