The 29-odd branches of the residuary non-banking finance company (NBFC) in the Lucknow region functioned as normal with no visible signs of panic either among its staff members or its depositors.
A visit to these branches revealed that the depositors were transacting as usual, depositing money and seeking other information. The company maintains it is meeting all maturity commitments as and when they arise.
A few customers were seen drafting applications for the withdrawal of their money on maturity today.
The manager of a company's branch in the trans-Gomti area here informed that the RBI action had no significant impact on their business.
"We are taking fresh deposits and people are operating their existing accounts as usual. Of course, there have been apprehensions in the minds of the depositors after the RBI move. There is nothing to worry as we fulfil all norms and regulations put forth by the RBI," he added.
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A sub-unit of SIFCL, Sahara India Real Estate Corporation, is also functioning as usual and witnessing the presence of its customers as normal days.
Another branch manager said the company was following all the Know Your Customer (KYC) norms. "We normally give maturity in June and also send intimation letters about two months before the actual date. We fulfil the KYC norms and submit all verification requirements like identification and address proofs," he informed. "We are getting queries from depositors and are readily clearing them," he added.
A depositor told Business Standard that although she was a little apprehensive in wake of the RBI ban, she had full faith in the company and its repayment capability. SIFCL has around 1,800 branches and six lakh agents.
Meanwhile, the RBI's deputy general manager has written a letter to the Uttar Pradesh Police seeking adequate security for RBI properties in the state in the wake of the regulator's action against the Sahara Group company.
The RBI had apprehended a law and order problem by collecting agents of SIFCL and some investors of the company in the state. UP Additional DGP (Law and Order) Brij Lal has issued the directives to all the SSPs, SPs, DIGs and Zonal IGs that adequate security be provided to the establishments and properties of the RBI in the state.
Earlier, the state department had also issued such a directive on June 4. On its part, the state government apprised the RBI that the regulator was "the competent authority to take a final decision in the matter as it is alone in the know of full and complete facts, circumstances and documents which has resulted in the passing of the said order."
Yesterday, the RBI approached the Supreme Court, challenging the Allahabad HC stay on its order banning SIFCL from accepting fresh deposits. The matter is posted for hearing on June 9 by a vacation Bench of the apex court headed by Justice Arijit Pasayat.
On June 5, the vacation Lucknow bench of the HC had stayed the RBI ban following a petition by SIFCL executive director O P Srivastava. KK Lahiri, counsel for Sahara in the apex court, said the NBFC has over 25 million depositors who have 42.5 million accounts with a cumulative deposit base of around Rs 18,000 crore.
RBI maintained that its action followed a show-cause notice issued to SIFCL and it found that the company "continuously violated" the requisite directions and guidelines.
The regulator had said the violations related to maintenance of directed investments, payment of minimum interest rate, asset-liability management guidelines and KYC norms stipulated for opening of deposit accounts and the details on the agents of the company deployed for deposit mobilisation. Another violation pertained to intimating depositors in time of maturity of their deposits and repayment of deposits on maturity.
The Lucknow Bench had posted the matter in the last week of July. The order was passed by a bench comprising Justices U K Dhawan and Shabihul Hasnain. The bench observed that it felt the RBI ban be stayed in the interests of small investors.
Meanwhile, senior Sahara officials could not be reached for their comments despite repeated attempts.