Look who wants a banking licence - Sahara!

Subrata Roy has decided to take his fight right to the tiger’s den. The controversial group has made known its wish to set up a bank, that too on a day the Reserve Bank of India notified stringent norms for issuing licences.

“We are fighters and we will remain so,” he has been quoted as saying in a Bloomberg report. His plan is to make the Sahara group “among the top few companies in the world” in three years.

And why does he think he is “fit and proper” to get a banking licence? Because he has been providing financial services to many unbanked Indians. Moreover, according a banking licence to the group will help the central bank in its financial inclusion initiatives, he says.

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[caption id=“attachment_840051” align=“alignleft” width=“380”] Subrata Roy believes Sahara is the ideal candidate since it has been providing financial services to many unbanked Indians.[/caption]

Interestingly, he is also fully aware that his quest for a licence is likely to be futile because of the ongoing fights with regulators.

“We have to fight, it is our obligation,” Roy has been quoted as saying in the interview.

It has to be remembered that Sahara has no love lost with the RBI. In 2008, the central bank had prohibited Sahara India Financial Corporation Ltd (SIFCL) from accepting deposits.

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The central bank had said that the residuary non-banking company had violated KYC norms stipulated for opening of deposit accounts and the details on the agents of the company deployed for deposit mobilisation. It also failed to intimate depositors in time of maturity of their deposits and repay deposits on maturity.

The group is also in the midst of a court battle with Sebi after the Supreme Court ordered two group companies to pay back about Rs 24,000 crore to investors in their bonds.

The apex court had ordered the refund as it found fund raising illegal. The group has claimed to have repaid about Rs 22,000 crore and deposited about Rs 5,000 crore with Sebi, which is overseeing the repayment.

Sebi is contesting these claims in the court and the next hearing of the case is on 17 July.

Recently, the Supreme Court transferred all cases against the two Sahara group companies to the apex court.

Now you know why the RBI has set such stringent preconditions for granting new banking licence. It is to keep such spirited fighters like Sahara away from a space which forms the backbone of Indian economy.

Read the full Bloomberg report here.