A vacation bench comprising Justices Arijit Pasayat and P P Naolekar fixed the date of hearing when counsel for the RBI requested urgent hearing of the petition in view of the flagrant violation of RBI guidelines by SIFCL and to protect the interest of large number of depositors. The RBI had earlier issued a show cause notice to SIFCL, the largest Residuary Non-Banking Company (RNBC), after inspection of its books. According to the RBI, Sahara Group company had violated norms governing maintenance of directed investment and payment of minimum rate of interest prescribed under the RNBC (Reserve Bank), directions 1987.
The company also violated Know Your Client (KYC) norms stipulated for opening of a deposit account.
The RBI had restricted SIFCL from accepting public deposit with immediate effect.
The Lucknow-based company has around 60 lakh investors with total deposit of about Rs 20000 crore.
The company challenged the RBI order before the Allahabad High Court which stayed the operation of the RBI order.
The RBI then approached the apex court against the stay order contending that the company had defaulted in payment of dues of its depositors on maturity. The RBI had directed the company to pay depositors the agreed rate of interest on the amounts actually held by it for entire term of the deposit as there was no default on the part of the depositors.
The RBI had also directed SIFCL to lodge all securities held in its custody with designated bank for custody and the company should strictly comply with the requirements of all the applicable provisions of the RBI Act, directions, guidelines, instructions and circular issued time to time until all the deposits were repaid with interest in full.
The company is working in different fields like insurance sector, mutual funds, real estate and entertainment. The company, however, assured its investors that their interest would be protected under all circumstances and they need not panic.