NEW DELHI: Terming Reserve Bank's order on banning acceptance of deposits by it as "unsound and arbitrary", Subroto Roy-led Sahara India Financial Corporation Limited on Wednesday pinned hopes on legal remedy for correcting the apex bank's decision. Reacting to the banking regulator's decision, the company said the order was passed in a "most vindictive and arbitrary manner" and did not conform to the RBI Acts. "The company has sanguine hopes of success in the proposed legal proceedings sought to be drawn at a very early date," the company added. The group also sought to assure that activities related to life insurance, mutual fund, real estate, media and entertainment, consumer products, Sahara Care House, tourism etc will continue as usual. Assuring the depositors of safety of their deposits, the company asked them "not to panic" and added that the central bank's order was without any consideration for depositors. "No inconvenience of any sort would be caused to the depositors who shall be reimbursed full amount on the maturity of their deposits, which have the requisite financial backing," the company said. It also maintained that it has always complied with the guidelines of the banking regulator. The RBI said in a notice today that "SIFCL is hereby prohibited with immediate effect from accepting any deposits in whatsoever manner, including installments under any running daily deposit or other deposits..." According to an RBI statement, the company had violated the central bank's directions and guidelines on maintenance of directed investment, payment of minimum rate of interest, KYC norms and non-intimation to depositors in time of maturity.
4 Jun, 2008, 2302 hrs IST, PTI
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