THE State Bank of India (SBI) has approached the Supreme Court for
vacating a stay on a decision to discontinue the Janata Deposit Scheme.
The scheme was introduced in 1971 to mobilise savings, especially of
middle and low income groups, in the country.
A Supreme Court bench comprising Justice HK Sema and Justice LS Panta, after hearing the SBI plea, issued notices to the deposit collectors of the scheme, asking them to explain why the stay should not be lifted.
Various high courts had stayed SBI’s decision to discontinue the scheme due to pleas by deposit collectors for the scheme.
Advocate Sanjay Kapur, on behalf of SBI, said the decision to discontinue the Janata Deposit Scheme was a policy matter taken in the interest of bank and public money. The scheme, introduced to inculcate the habit of saving among middle and low income groups, had begun to incur losses.
The commission paid to the deposit collectors along with other expenses incurred in running the scheme was more than the return the bank received on such deposits, argued Mr Kapur. The economic unviability of the scheme left the bank with no choice but its discontinuation, he said.
Relying on the Supreme Court’s decision in the Balco case, Mr Kapur said the wisdom and advisability of economic policies were ordinarily not amenable to judicial interference unless the policy was contrary to the statutory and constitutional provisions.
He picked holes in the Allahabad and Andhra Pradesh high courts’ orders, which had stayed SBI’s decision to discontinue the scheme. SBI, in 2001, had decided to discontinue the scheme leaving existing accounts to run till their maturity. The Allahabad and Andhra Pradesh high courts had stayed the discontinuation of the scheme on the petitions of State Bank Sanghkarta Sangh and AP Bank Deposit Collectors’ Association, respectively.
Challenging the high court orders, SBI said merely because the deposit collectors were termed as workmen (not regular employees), the bank could not be precluded from discontinuing the scheme, which was an economic burden on it.
The Janata Deposit Scheme was introduced in 1971 to mobilise savings, especially of middle and low-income groups. In 2001, SBI had decided to discontinue the scheme. It said the scheme had become economically unviable
The Allahabad and Andhra Pradesh high courts had stayed the discontinuation of the scheme on the petitions of State Bank Sanghkarta Sangh and AP Bank Deposit Collectors’ Association, respectively.
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