Subrata Roy-promoted Sahara India Investment Corporation Ltd (SIIC) has decided to exit the NBFC (non-banking finance company) business.
The company — which was a non-deposit taking NBFC – decided to exit the business as its objective has been changed to real estate. A company executive said that the Sahara group is restructuring its real estate business and some of the assets would come under the ambit of Sahara India Investment Corporation. He, however, did not disclose details, saying that the process was underway.
Sahara India Investment Corporation is distinct from Sahara India Financial Corporation (SIFCL), which is a residuary NBFC that accepts public deposits. SIFCL was under the Reserve Bank of India (RBI) scanner recently.
In a statement issued today, RBI said that on August 11, 2008, it cancelled the registration of Sahara India Investment Corporation.
“The company was more like a paper company which most Indian conglomerates have for investment purposes. Since there is a cost of regulation, we had asked all of such non-deposit taking NBFCs to merely file their annual statements. Many of them have voluntarily exited and Sahara has also done the same,” an RBI official said.
The assets of Sahara India Investment Corporation were not immediately available.
The RBI statement resulted in some panic but the company and the regulator stepped in to do damage control. A Sahara spokesperson said that the decision would have no bearing on Sahara India Financial Corporation, which had around four million depositors.
The company executive did not disclose if there were any cross-holding issues between Sahara India Investment and Sahara India Financial Corporation.
According to the new timeline set by RBI, Sahara India Financial Corporation has been allowed to invest deposits that mature in three years. It has been asked to have zero liability by June 30, 2015.
