Bank of India (RBI) watched almost helplessly as the residuary non-bank finance company (the term then used for the main engine of the group, Sahara India and Financial Corp) went on to garner deposits from ignorant savers, captivated by its charismatic promoter, the promise of high returns and the dramatic growth of the group. At one point of time, it was the country’s biggest employer after the Indian Railways, according to Time magazine.
Roy hobnobbed with the rich and the well-connected, all of whom vied to be seen in his company. His business empire sprawled across financial services, real estate, aviation, media and entertainment, and it seemed there was no stopping him.
Until, finally, the long arm of the law eventually caught up with him, though Roy himself served only a short part of his sentence behind bars. Remarkably, despite the strictures against him and his companies, the group continued to operate and diversify, though with the opening up of the economy and rise of other business titans, it soon became an also-ran.
To the more discerning, particularly those who track the financial sector more closely, however, Roy’s legacy lies in how the antics of the group spurred into action first RBI and then our capital markets regulator, the Securities and Exchange Board of India (Sebi). The expansion and tightening of RBI’s control over non-banking finance companies (NBFCs) can be directly traced to the regulator’s inability to rein in the activities of Sahara and its politically connected promoter.Read more on livemint.com