The 'credence' in Central Bank of India statements

Though Sahara India Financial Corporation Ltd plans to initiate legal proceedings against the RBI order banning it from accepting fresh deposits, I doubt if its going to assuage frayed depositor sentiments.

Sahara on its part has asked its 42.5 million depositors not to panic and added that its other businesses, life insurance, mutual funds, real estate, media & entertainment, consumer products and tourism, will not be affected by the move.

Would these assurances and the threat of legal proceedings against the RBI reassure depositors? My guess is, its going to be difficult, especially due to the credence that RBI statements carry, which depositors would weigh against Sahara's.


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