HONOURABLE SRI JUSTICE L. NARASIMHA REDDY WRIT PETITION No.1069 OF 2004 ORDER: Petitioner is the Federation of All India Banks’ Deposit Collectors. It feels aggrieved by the circular dated 27-11-2003 issued by the Andhra Bank, respondent herein, reducing the rate of interest on Bhagyalakshmi Deposits, with effect from 27-11-2003. 2. The Banks in India, particularly, the Nationalized Banks introduced schemes to encourage small deposits by petty traders etc. Since the network of the Banks was not widespread, a scheme was introduced to appoint agencies to collect the small deposits and remit them in the nearest bank. The rate of interest of such deposits was at 4.5% per annum upto 2 years, 5% per annum for 3 years and above, and 6% per annum for 4 to 5 years. Through the impugned circular, the respondent revised the rate of interest. According to this, the amount does not carry any interest for the first 2 years and it would carry interest at 2% per annum and no interest shall be paid in case of premature cancellation of deposits before 2 years. 3. Petitioner contends that on account of reduction of interest, no customer is coming forward to make deposits that in turn, is adversely effecting the commission that a deposit collector would have otherwise got. 4. Respondents filed counter – affidavit. It is stated that the scheme was introduced with a view to encourage small depositors, petty traders etc., at a time when the Bank’s activity was not widespread. It is stated that on account of opening of Branches, even in rural areas, and establishment of ATMs, accessible almost to every customer, the deposit activity under the Bhagyalakshmi Scheme lost importance and the Bank has been incurring huge loss, year after year. Reference is made to the disputes that have been raised in this regard. 5. Heard Sri A.K. Jayaprakash Rao, learned counsel for the petitioner and Dr. Lakshmi Narasimha, learned Standing Counsel for the respondent. 6. Members of the petitioner, no doubt, were able to convince the depositors / customers by explaining that the rate of interest offered by the Bank is encouraging, that in turn, has resulted in a fairly reasonable commission to them. In the counter – affidavit, the respondent has explained that different Banks have introduced highly competitive schemes, and on account of opening of the Branches, almost every village by one bank or the other, the necessity to continue the Bhagyalakshmi Scheme virtually, ceased to exist. The facts and figures for the respective years are furnished in terms of the losses incurred by the bank. Though the reduction of interest would certainly have an impact upon the deposits, the petitioner do not have any right to insist that the respondents must pay a particular rate of interest on the deposits. It is for the respondents to decide the rate of interest, to be paid on deposits depending on their viability. 7. Hence, the Writ Petition is dismissed. There shall be no order as to costs. ____________________ L. NARASIMHA REDDY, J November 18, 2010. KTL 7