UP govt takes step in view of sahara's depositors possible reaction

Lucknow, June 5 (UNI) A day after Reserve Bank of India (RBI) barred Sahara India Financial Corporation Ltd (SIFCL) from raising fresh money from the public with immediate effect, Uttar Pradesh government today directed all the districts to maintain law and order in case of depositors panic backlash.

A radiogram sent to all the DMs, SPs , DIGs and IGs directed them to ensure adequate security at and around the RBI office premises, the local and branch offices of SIFCL and also other premises of Sahara India including Sahara Mall at Lucknow, Sahara City among others and residential premises of key officials of the company.

It also said the RBI order is likely to create a sense of insecurity among the depositors who might agitate against SIFCL and gherao the registered office and other offices.

The Central Bank has not only banned the fresh deposit but also asked Sahara India Finance to lodge all securities held in its custody with a designated bank. The decision was taken in public interest and to protect the interest of the depositors, the order said.

In its response, Sahara India Finance, the Lucknow-based residuary non-banking finance 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''. The company also said it will soon initiate a legal challenge.

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

The RBI has also asked Sahara India Finance to notify all its agents and employees that it has been prohibited from accepting deposits and shall paste a copy of the order in a ''conspicuous'' place at each of its branches and offices.

The Deputy General Manager (DGM), RBI (Lucknow) has also written a letter to Additional Director General (ADG) of Police (Law and Order) yesterday apprehending law and order situation.

Meanwhile, the UP chief secretary Atul Kumar Gupta has written to RBI Executive Director G Gopal Krishnan that the order did not even prohibit SIFCL from alienating its assets, which the RBI is empowered by section 45 MB(2).

''....even though the RBI order has been passed to protect the interests of the depositors, it is not doing enough,'' the letter said.

The UP Chief Secreatry also asked in the letter ''it appears imperative that the RBI clarifies to the depositors, at large, how the interests of the depositors are being protected and what the RBI will be doing to ensure it.'' UNI SB MB SG RK1630