Borrower Is Entitled To Expect Bank To Safeguard And Return Title Documents After Repaying Loan: Bombay High Court

The Bombay High Court has recently ruled that a borrower who has fully repaid a loan is entitled to assume that a bank or financial institution entrusted with original title documents will preserve them properly. It must also return the documents after the secured liability is discharged."In our view, a borrower who has fully discharged the loan is entitled to proceed on the legitimate assumption that the Bank or a Financial Institution entrusted with the custody of valuable original title...

RBI Can Supersede Multi-State Co-Operative Bank Board For Up To Five Years In Public Interest: Supreme Court

The Supreme Court has ruled that the Reserve Bank of India can supersede the Board of Directors of a multi-State co-operative bank and extend the period of supersession from time to time, subject to an overall limit of five years. This power can be exercised in public interest, to protect depositors and the bank from harmful management, or to ensure proper management of the bank."Thus, for reasons to be recorded, the power of supersession of a multi-State co-operative bank, can be exercised by...

Banks Can Use SARFAESI To Recover Dues Under Loans Acquired From Non-Notified Institutions: Supreme Court

The Supreme Court has ruled that a bank can use the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, commonly known as the SARFAESI Act, to recover a secured loan it acquired from an entity not covered by the law. This applies even if the original lender was not covered by the Act when the loan was granted.Justices Sanjay Kumar and Sanjeev Sachdeva ruled,“When the institution is one to which the SARFAESI Act is already applicable, acquisition...

Mumbai Special CBI Court Grants Bail To Ex-RCFL CEO Devang Mody In ₹9,280 Cr. Loan Diversion Case

The Special CBI Court at Mumbai on 29 August granted bail to Devang Pravin Mody, former CEO and Director of Reliance Commercial Finance Limited (RCFL), in a case concerning the alleged diversion of loans worth about Rs. 9,280 crore sanctioned by a consortium of 31 banks and financial institutions to RCFL and group entities. Special Judge Nitin Virsen Jiwane allowed Mody's bail application, noting that the allegations regarding his alleged role were generic, other accused had not been arrested,...

Supreme Court Upholds RBI's Decision To Supersede Abhyudaya Co-operative Bank Board, Appoint Administrator

The Supreme Court on Thursday refused to interfere with the Bombay High Court's November 18, 2024 judgment upholding the Reserve Bank of India's decision to supersede the Board of Directors of Abhyudaya Co-operative Bank Ltd. and appoint an Administrator for the bank.The Bombay High Court had rejected the challenge to RBI's November 24, 2023 order superseding the bank's Board for one year under Section 36AAA read with Section 56 of the Banking Regulation Act, 1949. The High Court held that the...

RBI Appoints Suman Ray As Executive Director With Effect From 1 September

The Reserve Bank of India (RBI) has appointed Suman Ray as Executive Director with effect from 1 September 2026. Ray was serving as the Regional Director for Maharashtra before his elevation. He has over 30 years of experience with the RBI and has worked across several areas, including currency management, financial inclusion, payment and settlement systems, consumer education and protection, and human resources. He has also served as Secretary to the Western Area Local Board of the RBI. As...

LOC Cannot Be Issued Against Director Merely For Company's Loan Default: Delhi High Court

The Delhi High Court on 10 August held that a Look Out Circular (LOC) cannot be issued merely because a person was a non-executive director of a company that failed to repay bank dues, particularly when the bank has already initiated legal proceedings to recover the amount. Justice Jasmeet Singh cancelled the LOC issued against Tushar Dey, a former independent and non-executive director of Birla Aircon Infrastructure Pvt Ltd (BAIPL), and directed the Bureau of Immigration to communicate the...

Company's 'Fraud' Classification Doesn't Automatically Attract Penal Consequences For Directors: Bombay High Court

The Bombay High Court has held that directors would not face penal consequences under the Reserve Bank of India's 2024 Fraud Master Circular merely because their company has been declared "fraud." The directors themselves must be declared “fraud” after following the procedure prescribed under the Circular. “Merely by declaring the 5th Respondent Company as “fraud” and the Petitioners not being declared as “fraudsters” by the 1st Respondent Bank would not visit upon them the penal consequences...

Borrower Cannot 'Blithely' Ignore Banks' Accounting System While Calculating Loan Liability: Supreme Court

The Supreme Court has observed that a borrower, in this case a trust and its trustees, cannot keep changing its calculations of loan liability to suit its interests while ignoring the accounting system followed by banks.A bench of Justices Sanjay Kumar and Sanjeev Sachdeva observed, “The Trust and its trustees cannot blithely ignore the accounting system followed by banks and come up with different calculations at different points of time to suit their own interests.”The top court restored the...

NBFC's Pending Amalgamation Application Not Enough To Claim It Meets NOF Requirement: Calcutta High Court

The Calcutta High Court has recently held that a pending amalgamation proposal does not give a Non-Banking Financial Institution (NBFI) a legal right to claim that it meets the prescribed Net Owned Fund (NOF) requirement when the amalgamation has not actually gone through.Justice Sabyasachi Bhattacharyya observed that even if the Reserve Bank of India (RBI) had approved Nadia Printing & Packaging Pvt Ltd's proposed amalgamation with five other companies, further steps would still have been...

Bombay High Court Upholds Fraud Tag On Former Realme Zonal Distributor, Rejects Ex-Director's Plea

The Bombay High Court on Thursday dismissed a writ petition filed by Anil Khemani, former director of Eagle Electronics India Pvt Ltd (EEPL), a Realme zonal distributor. Khemani had challenged Axis Bank's show cause notice and its decision declaring the company's account as "fraud". A division bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla upheld the bank's October 16, 2025 order. The Court found no violation of the principles of natural justice and held that the fraud...

Lok Sabha Passes Bill Giving Centre Power To Decide Which Digital Payments Are Free Of Merchant Charges

The Lok Sabha on Thursday passed the Taxation and Other Laws (Amendment) Bill, 2026. The Bill amends the Payment and Settlement Systems Act, 2007, to give the central government the power to decide which digital payment modes, including those currently exempt from merchant charges such as UPI and RuPay debit cards, will continue to enjoy that protection. At present, Section 10A of the Payment and Settlement Systems Act prohibits banks and payment system providers from levying charges on digital...