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19 February 2004
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Thursday
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27 Zilhaj 1424
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Verdict reserved on plea against SBP circular
By Correspondent
LAHORE, Feb 18: The Lahore High Court reserved on Wednesday judgment on a writ petition, challenging the authority of the State Bank to secure personal details of all commercial banks' depositors who earn Rs10,000 or more profit on their accounts annually.
The State Bank, through circular No 22 of June 30, 2003, directed all commercial banks to furnish the names, national identity card numbers and total amount in the accounts of depositors who were earning an annual profit of Rs10,000 and above.
The circular said the classified information was required by the Central Board of Revenue which had written to the State Bank to furnish such information from all the commercial banks.
The National Bank, through circulars sent on July 7, July 5 and July 24, 2003, with reference to the State Bank circular, sought the same information from all its branches across the country for transmission to the SBP.
Lawyer-petitioner M.D. Tahir pleaded that the SBP and the NBP circulars were unlawful and amounted to breach of the trust between a bank and its depositors that their personal details and accounts would be kept in complete secrecy.
Referring to Section 46 of the State Bank of Pakistan Act, 1956, Section 31-A of the Banking Companies Ordinance and a number of judgments of superior courts in related cases, the lawyer-petitioner argued that no state authority could seek such a classified information.
The State Bank had no powers to ask for such a data and the circulars issued at the beginning of 2003-04 fiscal year was unconstitutional and unlawful. The directive would wreck the banking industry and ruin the bank-depositor relations and trust.
The people would lose faith in banks and keep their deposits in unlawful schemes that had in the past led to many scams, he stated.
The information sought by the CBR was illegal and there were reasons to believe that it had ulterior motives. The CBR move seemed motivated by interests which could in no way serve the supreme national interest, the lawyer-petitioner pleaded.
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