Writ Courts Cannot Force NBFCs To Regularise NPAs After SARFAESI Notice: Keral High Court

The Kerala High Court has held that courts cannot compel banks or Non-Banking Financial Companies to regularise loan accounts classified as Non-Performing Assets. Such directions cannot be issued once proceedings under the SARFAESI Act have been initiated especially diregarding the specific stand taken by NBFC. Setting aside an order granting instalment relief to a defaulting borrower, a Division Bench of Justices Anil K. Narendran and Muralee Krishna S. held: “When the...

Surviving Joint Holder Cannot Claim Ownership Of Bank Locker Contents After Co-Holder's Death: Kerala High Court

The Kerala High Court has recently clarified that the “either or survivor” clause in a joint bank locker agreement, which ordinarily allows the surviving holder to operate the locker after the other's death, does not confer ownership rights over its contents. “The concept of the entitlement of one of the joint holders to have a right over the money, which is deposited in the joint account or fixed deposit, is entirely different and cannot be applied to the case of a bank locker,” the Court...

Kerala High Court Mandates Police Verification Of Petitioner's Identity In Bank Account Defreezing Pleas

The Kerala High Court has recently directed strict procedural safeguards in cases where petitioners seek defreezing of their bank accounts, mandating police verification of identity before such pleas are entertained. A Division Bench comprising Chief Justice Soumen Sen and Justice Syam Kumar V.M. issued the directions while disposing of a suo motu Judicial Practice and Procedure (JPP) proceeding initiated by the Court. The bench ordered that the Registry of the High Court shall not accept any...

RBI Draft Directions Propose To Curb Mis-Selling Of Financial Products By Banks, Ban Compulsory Bundling

The Reserve Bank of India has proposed to prohibit compulsory bundling of financial products, bar the use of “dark patterns” on digital platforms, and require explicit, product-wise consent before banks sell financial products to customers. The proposals are part of the Draft Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Amendment Directions, 2026. The framework will apply to Commercial Banks other than Small Finance Banks, Payment Banks, Regional Rural Banks and...

New RBI Directions Raise Collateral-Free Loan Limit For MSEs From ₹10 To 20 Lakh

The Reserve Bank of India (RBI) recently doubled the collateral-free loan limit for Micro and Small Enterprises (MSEs) from Rs. 10 lakh to Rs. 20 lakh.This change was made through the Lending to Micro, Small & Medium Enterprises (MSME) Sector (Amendment) Directions, 2026, and the revised limit will take effect from 1 April 2026.The move aims to strengthen last-mile credit delivery to smaller businesses with limited assets. By raising the ceiling to Rs. 20 lakh, the RBI aims to ease access to...

Bank Can Exercise Lien On Guarantor's Salary, Section 60 CPC Not Applicable: Kerala High Court

The Kerala High Court on 9 February held that a bank is entitled to exercise its right of lien over a guarantor's salary account. It clarified that protection under Section 60(1)(i) CPC does not restrict the bank's substantive right. A Division Bench of Justice Anil K. Narendran and Justice Muralee Krishna S, while deciding cross appeals filed by Canara Bank and the guarantor, Agi Kumar, allowed the bank's appeal and set aside the single judge's direction limiting the lien. The judges...

Non-Borrower Aggrieved By SARFAESI Action Can Approach DRT, Writ Not Maintainable: Rajasthan High Court

The Rajasthan High Court has recently held that a flat purchaser whose property is treated as a secured asset under the SARFAESI Act cannot bypass the remedy before the Debt Recovery Tribunal by directly invoking writ jurisdiction. The court said a writ petition is not maintainable when an effective statutory remedy is available. Justice Sunil Beniwal dismissed the petition, holding that even though the petitioner was not a borrower or a guarantor, the possession notice directly affected his...

MSME Revival Benefits Depend On Loan Limit, Not Outstanding Dues: Bombay High Court

The Bombay High Court recently held that eligibility for benefits under the Reserve Bank of India's framework for revival and rehabilitation of MSMEs depends on the sanctioned loan limit and not on the outstanding amount. The court, thus, cleared the way for Union Bank of India to continue insolvency proceedings against Vardhan Agro Processing Limited. A Division Bench of Justice Manish Pitale and Justice Shreeram V. Shirsat heard the case. While explaining the scope of the RBI framework, the...

Budget 2026-27: Centre Set Up High-Level Committee To Review The Banking Sector

Presenting the Union Budget 2026 in the Lok Sabha on Sunday, Finance Minister Nirmala Sitharaman announced a series of measures for the financial sector, including the setting up of a high-level committee to review banking, restructuring of key public sector NBFCs, and reforms to foreign investment and bond market frameworks.The Finance Minister said the Indian banking sector is currently marked by strong balance sheets, historic highs in profitability, improved asset quality and coverage, and...

Banks Must Examine MSME Restructuring Claims Before Proceeding Under SARFAESI: Calcutta High Court

The Calcutta High Court has recently held that once an MSME borrower raises a restructuring claim in reply to a SARFAESI demand notice, the bank cannot carry on with recovery proceedings without first taking a decision under the RBI's revival framework. Justice Krishna Rao said the obligation on the bank is mandatory when such a claim is made with reasons and an affidavit. “It is mandatory on the part of the bank that, in reply, if the borrower claims benefit of the FRAMEWORK with reasons...

Police Can't Debit-Freeze Accounts Without Magistrate's Order: Delhi High Court Grants Relief To Malabar Gold

The Delhi High Court has directed the immediate defreezing of bank accounts of Malabar Gold and Diamond Limited, noting that the respondents were unable to demonstrate any complicity of the company in an alleged cyber fraud. Justice Purushaindra Kumar Kaurav observed that the continued freezing and withholding of the company's accounts, without following the procedure prescribed in law, could not be justified. The court, relying on an earlier order of the court, observed that freezing bank...

Oral Deposit Still Repayable: NCLT Allahabad Directs NBFC To Refund Over ₹30 Lakh To Depositor

The National Company Law Tribunal (NCLT) at Allahabad has directed a non-banking financial company (NBFC) to refund nearly Rs 30 lakh with interest to a depositor with whom the company did not have any written deposit agreement. The tribunal held that the absence of a written agreement cannot be used as a defense to withhold repayment once receipt of funds is admitted and there is utilization. Allowing a petition filed by Nidhi Agarwal against Shivam Traders and Hire Purchase Private...