India savers in dark over Sahara's latest shadow banking schemes

Patna, India

IN 2004, Khitish Kumar Pandey took 10,000 rupees (S$212) out of his pension and put it into a savings plan run by India's embattled Sahara conglomerate. The Sahara agent told him that his money would triple in 10 years.

Sahara India Pariwar had become one of India's most successful companies over the past three decades with this kind of financial alchemy, turning tiny deposits into dreams for small farmers, rickshaw pullers and food vendors with little financial knowledge.

Mr Pandey, a 78-year old resident of the east Indian city of Patna, said that the Sahara agent promised him that his money would grow to roughly 30,000 rupees when the time deposit matured in October of last year....

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