Bombay High Court Reads Down RBI 5-Year Ban On New Venture Funding For Wilful Defaulters After NPA Settlement

The court held the five-year embargo cannot continue unless it is established that the borrower is guilty of fraud or has siphoned or diverted funds.

RBI Approval Needed To Enforce Foreign Decree Where FERA Regime Applies: Supreme Court

The Supreme Court of India on Tuesday clarified that enforcement of a foreign decree arising from a transaction governed by India's foreign exchange regulatory regime would require prior approval of the Reserve Bank of India (RBI), where such approval is mandated under the governing statutory framework. A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe held that while there is no prohibition on the initiation of proceedings or determination of liability based on a foreign decree,...

Hypothecation Agreements Attract Stamp Duty As General Agreements, Not Pledge Or Mortgage: Kerala High Court

The Kerala High Court has held that a hypothecation agreement executed to secure a loan attracts stamp duty as a general agreement under Article 5(g) of the Kerala Stamp Act and not as a pledge or mortgage, which attracts higher duty. Clarifying the position, the court said Article 6 of the Act applies only to pledges. “Article 6 of the Act will get attracted only if the instrument in question is a 'pledge'. On a conspectus reading of the agreement of hypothecation, it is evident that the...

Bombay High Court Quashes Union Bank's Wilful Defaulter Tag Against Former Promart Director

The Bombay High Court has recently quashed the Union Bank of India's decision declaring Punit Agarwal, a former director of Promart Retail India Pvt. Ltd., a willful defaulter in relation to credit facilities of about Rs. 40 crores, holding that the action violated the RBI Master Circular on Wilful Defaulters dated July 1, 2013 and principles of natural justice.A Division Bench of Justices Bharati Dangre and Manjusha Deshpande held that the mechanism adopted by the bank was contrary to the law...

Bank Receiving Cheques Acts As Agent Of Customer, Liable Under Consumer Law For Delay In Presentation: Supreme Court

The Supreme Court on Wednesday held that a bank receiving cheques for collection acts as an agent of the customer and must exercise due diligence in presenting them within the prescribed validity period, failing which it would amount to negligence and deficiency in service under consumer protection law. The top court upheld the finding of deficiency in service against Canara Bank but reduced the compensation awarded by the National Consumer Disputes Redressal Commission to Kavita Chowdhary from...

Supreme Court Refuses Anil Ambani's Plea To Restore Stay On Banks' Fraud Classification Proceedings

The Supreme Court on Thursday refused to interfere with a Bombay High Court Division Bench order that vacated the stay granted by a single judge in fraud classification proceedings against Anil Ambani involving Bank of Baroda and other banks. A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M. Pancholi declined to grant relief, effectively allowing the High Court's order to stand.The court, however, clarified that the observations made by the High Court would not...

RBI Imposes ₹7.5 Lakh Penalty On Himachal Pradesh State Co-operative Bank Ltd. for KYC Non-compliance

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 7.5 lakh on the Himachal Pradesh State Co-operative Bank Ltd. for non-compliance with certain Know Your Customer (KYC) directions. The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. As per the press release dated April 13, 2026, the action was based on findings from a statutory inspection conducted by the National Bank for Agriculture and Rural Development...

RBI Circular Requiring Banks To Reverse Unauthorized Transactions To Customers Apply Independently Of Criminal Probe: Bombay HC

The Bombay High Court has held that RBI rules shielding customers from liability in online fraud and requiring banks to reverse such transactions where the customer is not at fault apply independently of any criminal investigation and directed HDFC Bank to remit Rs. 38.04 lakh to a businessman who lost the amount in a cyber fraud. A bench of Justices Bharati Dangre and Manjusha Deshpande said the RBI's July 6, 2017 framework on unauthorized electronic banking transactions is intended to protect...

Calcutta High Court Quashes Wilful Defaulter Action Against BSCPL, Finds No Evidence

The Calcutta High Court has set aside a lender's attempt to classify BSCPL Infrastructure Ltd. and its guarantor as “wilful defaulters”, quashing a show cause notice issued after the Wilful Defaulter Identification Committee proposed such classification on December 18, 2025, holding that there was no material to satisfy the RBI framework. Justice Krishna Rao held that the essential ingredients of “wilful default” were not made out, observing: “This Court finds that the respondents have not...

Withdrawal Slip Can Qualify As 'Cheque' If It Operates As Payment Mandate: Kerala High Court

The Kerala High Court recently held that a withdrawal slip drawn on a co-operative society qualifies as a “cheque” under the Negotiable Instruments Act, 1881, if it functions as a mandate for payment. Justice C.S. Dias, sitting in a Single-Judge Bench, considered a petition filed by Clara Dominic, the accused in a summary trial before the Judicial First Class Magistrate Court, Pala, seeking to quash proceedings under Section 138 of the Act. The Court observed: “The substance of the...

RBI Cancels 54 NBFC Licenses, 16 Others Exit Business Voluntarily

The Reserve Bank of India (RBI) has cancelled the licences of 54 NBFCs, barring them from carrying out financial business. The central bank said it acted under its powers under Section 45-IA(6) of the RBI Act, 1934, which allows it to cancel or accept the surrender of licences of NBFCs when they do not meet regulatory requirements. A large number of these companies whose licenses were cancelled were based in Delhi, with others located in Haryana, West Bengal, and Telangana. Some of the...

NBFC Must Meet NOF Before Licence Cancellation To Get Relief, Not After: Delhi High Court

The Delhi High Court has held that relief against cancellation of an NBFC licence is granted only where the Net Owned Fund requirement is fulfilled prior to the cancellation order, and not where compliance is achieved thereafterA Division Bench of Justices Prathiba M. Singh and Madhu Jain was dealing with a petition filed by M K G Financial Services Pvt. Ltd., challenging the RBI's decision to cancel its NBFC registration for failing to meet the minimum NOF requirement of Rs 2 crore.Petitioner...