90% Sahara depositors don’t have bank accounts

The Supreme Court’s direction was one thing, but how does Sahara group’s three crore investors get back the Rs 24,000 crore the company is supposed to refund them? As per the company’s admission, a vast majority of these investors don’t have a bank account, whereas the Securities and Exchange Board of India (Sebi) proposes to transfer the money through payment methods that require a bank account.

“Around 90% of our depositors, investors are those very small investors, who never go to banks and banks too never reach them,” Sahara said in an advertisement issued the day after the SC asked it to refund the money raised by two of its group companies — Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation Ltd — through optionally fully convertible debentures.

If needed, Sebi could take the help of an outside agency, the SC had said. Sebi subsequently came out with a tender asking registrar and transfer agents (RTAs) to bid for handling the work.

While the tender document does not mention Sahara, figures of 3 crore investors and 30 crore documents correspond to publicly available numbers concerning the Sahara case.

A subsequent document discusses electronic payment as the main method of redemption. “At present, it is proposed to make payments through NEFT/RTGS. However, depending upon the need to make payments through warrants, the RTA would have to make necessary arrangements for the same,” it said.

RTGS (Real Time Gross Settlement) and NEFT (National Electronics Funds Transfer System) involve direct transfer of money from one account to another. A warrant too requires a bank account for deposit.

Emails sent to Sahara and Sebi representatives did not receive a response.

The Problem

The SC has directed the Sahara group to refund Rs 24,000 crore among its investors. However, most of them do not have a bank account. Sebi proposes to transfer the money through methods which need a bank account.

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