RBI Penalises Muthoot Finance, Muthoot Vehicle and Asset Finance For KYC Lapses

The Reserve Bank of India (RBI) has imposed a Rs. 5.80 lakh penalty on Muthoot Finance Limited for non-compliance with certain Know Your Customer (KYC) directions issued by the RBI. The penalty was imposed through an order dated July 10, 2026. According to the RBI, the company had failed to put in place a system for periodic review of the risk categorisation of accounts. The company had also not implemented a robust software system for the effective identification and reporting of suspicious...

Kerala High Court Revises Its Guidelines On Freezing Bank Accounts Suspected Of Money Mule Activity

The Kerala High Court on 14 July held that banks can freeze accounts suspected to be “money mule” accounts based on their own assessment of suspicious activity, even without a requisition from a law enforcement agency, as they are best placed to identify such accounts. Therefore, courts must give due weight to their assessment. Justice M.A. Abdul Hakhim revised the guidelines governing the freezing of suspected money mule accounts while disposing of a petition filed by Ajith P.R. seeking a...

Minor Admitted To Partnership Firm's Benefits Not Liable For Firm's Loan Default: Kerala High Court

The Kerala High Court on 7 July held that a person admitted only to the benefits of a partnership firm as a minor cannot be treated as a defaulter for the firm's loan merely because the firm failed to repay its dues. Justice M.A. Abdul Hakhim allowed a petition filed by Dhruv Hitesh Dattani challenging adverse remarks in his CIBIL report, observing that since the partnership firm had already dissolved before he attained majority, there was no occasion for him to exercise the option under...

Kerala High Court Warns Against Misuse Of Writ Petitions By “Money Mule” Account Holders

The Kerala High Court on 10 July cautioned against the misuse of writ petitions seeking the unfreezing of bank accounts allegedly used as “money mule” accounts in cyber fraud cases, observing that account holders were increasingly filing such petitions to obtain orders allowing them to continue operating accounts used to facilitate fraudulent transactions. Justice M.A. Abdul Hakhim dismissed a writ petition seeking the unfreezing of a bank account and directed the Station House Officer, Tanur...

Pending Arbitration Doesn't Bar Wilful Defaulter Proceedings Against Guarantors: Calcutta High Court

The Calcutta High Court has held that the pendency of arbitration proceedings does not prevent a non-banking financial company (NBFC) from initiating wilful defaulter proceedings against a guarantor under the RBI Master Circular. The court, however, upheld the quashing of a show cause notice issued by SREI Equipment Finance Ltd after finding that it was vague and lacked material particulars. A division bench of Justice Shampa Sarkar and Justice Ajay Kumar Gupta partly allowed SREI Equipment...

Kerala High Court Upholds Rejection Of Education Loans Over Parents' Or Co-Borrowers' Poor Credit Scores

The Kerala High Court has upheld the rejection of educational loan applications filed by a batch of students after finding that their parents or co-borrowers had unsatisfactory credit scores or adverse credit histories. "In view of the aforesaid discussion, I find that the stand of the Respondents/Banks that the Applicants are not eligible for Educational Loan on account of the lower Credit Score/unsatisfactory Credit Report of the co-borrower/parent is sustainable.", the court...

Pre-2016 DRT Recovery Certificate Cannot Trigger Insolvency Under Presidency Towns Insolvency Act: Supreme Court

The Supreme Court on Monday held that a recovery certificate issued by a Debt Recovery Tribunal (DRT) before the 2016 amendment to the Recovery of Debts and Bankruptcy Act cannot be treated as a decree or order for initiating insolvency proceedings under the Bombay's Presidency Towns Insolvency Act, 1909. Dismissing HDFC Bank's appeal, the court observed that Parliament recognised such equivalence only through the 2016 amendment. A bench of Justices Dipankar Datta and Satish Chandra Sharma...

Supreme Court Upholds RBI Scheme For Merger Of PMC Bank With Unity Small Finance Bank

The Supreme Court on Monday refused to interfere with the Bombay High Court's March 9, 2026, judgment upholding the Reserve Bank of India's scheme to merge the crisis-hit Punjab and Maharashtra Co-operative Bank with Unity Small Finance Bank.It, however, kept open the question of whether, while framing amalgamation schemes for distressed banks under Section 45 of the Banking Regulation Act, the Reserve Bank of India must assess the "interest of depositors" based on the number of depositors or...

UK-Based Arms Consultant Sanjay Bhandari Moves SC Against Delhi HC Fugitive Economic Offender Ruling

Businessman Sanjay Bhandari has approached the Supreme Court against the Delhi High Court's decision affirming his declaration as a Fugitive Economic Offender under the Fugitive Economic Offenders ActBhandari, a defence consultant is under investigation in the alleged Pilatus basic trainer aircraft procurement and Tatra all terrain military truck procurement cases apart from proceedings under the Black Money Act.The special leave petition filed on July 9 is yet to be listed before the apex...

Delhi High Court Refuses To Stay Former Congress MLA Rajendra Bharti's Conviction In Gramin Vikas Bank Fraud Case

The Delhi High Court on Friday refused to stay the conviction of former Madhya Pradesh MLA and Congress leader Rajendra Bharti for defrauding the Zila Sahkari Krishi Aur Gramin Vikas Bank The order leaves his conviction operative and his disqualification from the Madhya Pradesh Assembly undisturbed ahead of the scheduled by-election for the Datia constituency. A single-judge bench of Justice Manoj Jain dismissed Bharti's application seeking a stay on his conviction pending the disposal of his...

Bombay High Court Quashes BOI's Fraud Tag Against Future Lifestyle, Promoters Kishore Biyani, Rakesh Biyani

The Bombay High Court has recently quashed Bank of India's order classifying Future Lifestyle Fashions Ltd.'s (FLFL) loan account as fraud. The order had also named the company's promoters, Kishore Biyani and Rakesh Biyani, and its Managing Director, Vishnuprasad Mokkapatty.The court found that the bank's decision did not explain why the account and the individuals had been brought within the fraud classification despite referring to the show cause notice, the replies received, and the forensic...

Rajasthan High Court To Decide If Police Can Levy Fees On Banks For SARFAESI Possession Assistance

The Rajasthan High Court is set to examine whether the Police Department can levy charges on banks for providing police assistance to recover secured assets under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. A Single Bench of Justice Sameer Jain on 6 July was hearing a petition filed by AU Small Finance Bank Ltd challenging the Rajasthan Police Department's levy of charges for providing police assistance in...