Sahara India Financial Corporation on Tuesday got a fresh lease of life, with the Reserve Bank of India allowing it to accept fresh deposits that mature in three years.
The move ends the two-week-long uncertainty over fates of the 42.5 million depositors of the Subroto Roy-controlled residuary non-banking company.
On June 4, the RBI banned Sahara from accepting public deposits on grounds that it was not following the prescribed norms. The regulator changed its earlier decision following Supreme Court-mandated meetings with top Sahara executives on June 12 and June 16.
Sahara has been asked to submit a comprehensive business plan by August 16.
Sources close to the development said the move would mean that the company, with a deposit base of around Rs 18,000 crore, may not have to wind up and could continue in a form which will be decided soon.
Sahara has been asked to repay all deposits when they mature and bring the Aggregate Liability to Depositors -- the sum of deposits and the interest accrued on it -- to zero by June 30, 2015.
In addition, the RBI has mandated that the ALD should not exceed Rs 15,000 crore on June 30, 2009, Rs 12,600 crore on June 30, 2010 and Rs 9,000 crore on June 30, 2011.
In case of existing deposits, Sahara has to stop accepting installments from June 30, 2011.
Besides, it has to comply with the investment norms which mandate that RNBCs invest 100 per cent of their deposits in approved securities, including government bonds. Compliance with the know-your-customer norms has also been reiterated.
The RBI also said it was ready to accept Sahara Managing Worker and Chairman Subroto Roy's proposal to reconstitute the RNBC board.
By mid-July, the board will have to be reconstituted to include 50 per cent independent directors who are "acceptable" to the regulator. In addition, during its annual general meeting, to be held by August 31, the company will appoint statutory auditors from a panel suggested by the RBI. The practice will have to be followed till all depositors are repaid.
A spokesperson of Sahara India said: "We always respect natural justice, we will go by the true spirit of the order."
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