INDIA BUSINESS WORLD - NOVEMBER 16^th - NOVEMBER 30^th - 2007

SUPREME COURT TO HEAR PLEA OF SBI'S JANATA DEPOSITORS

The Supreme Court has decided to examine the plea of State Bank of India's Janata Deposit Collectors Association seeking direction to the bank not to discontinue the scheme which was introduced to mobilise the savings of small and middle class people across the country.

The association in its application filed through counsel BK Pal sought direction to SBI for enforcement of the existing Janata Deposit Scheme as it is economically viable. SBI's branches in the Chandigarh circle are not allowing the collectors of Janata Deposit Scheme to open up new accounts for the purpose, said the association. In support of the plea, the association has annexed an official letter of SBI which said, "We have to advise that the Janata Deposit Scheme has since been closed. Hence, no new accounts are to be opened under the scheme. The Janata Deposit Collector will only cater the existing accounts."

A bench comprising Justice HK Sema and Justice VS Sirpurkar ordered for listing of the application after four weeks to hear it, along with the petition of SBI. Earlier, SBI had moved the apex court seeking vacation of the stay on its decision to discontinue the Janata Deposit Scheme, saying it was economically unviable. Various high courts had stayed SBI's decision to discontinue the scheme.

Advocate Sanjay Kapur, on behalf of SBI, had said the decision to discontinue the Janata Deposit Scheme was a policy matter taken in the interest of bank and public money. The scheme, which was introduced in 1971 to inculcate the habit of savings, especially among middle and low income groups, began running into losses.