Borrowers Entitled To Audit Reports Before Fraud Classification, No Right To Full Disclosure: Supreme Court

The Supreme Court on Monday ruled that borrowers must be given access to the material relied upon by banks, including relevant portions of forensic audit reports, before their loan accounts are classified as fraud but clarified that such disclosure is not absolute and may be restricted where it affects third-party rights. Holding that principles of natural justice require a meaningful opportunity to respond, a bench of Justices J.B. Pardiwala and K.V. Viswanathan said that where banks rely on...

Manipur High Court Sets Aside E-Auction, Says Bank Can't Offer OTS And Deny Redemption On Same Day

The Manipur High Court has declared an e-auction illegal after finding that the bank offered a One Time Settlement (OTS) valid till March 31, 2018 and, on the very same day, denied the borrower's right of redemption without establishing that any revised deadline was communicated.A Division Bench of Chief Justice M. Sundar and Justice A. Guneshwar Sharma held that such conduct violated principles of natural justice and procedural fairness and that a bank cannot take inconsistent positions to the...

Cheque Not Legally Enforceable For Full Amount If Part Payment Not Endorsed: Kerala High Court

The Kerala High Court has held that a cheque presented for its full value despite prior part payments without endorsement does not represent a legally enforceable debt, while upholding an acquittal in a cheque dishonour case. Justice A. Badharudeen, while dismissing an appeal filed by complainant Danikutti Philip, held, "However, when part payment(s) is/are made and the indorsement mandated under Section 56 of the NI Act failed to be recorded, presenting the cheque for the whole sum, of which a...

Non-Signatory To Cheque From Joint Account Cannot Be Prosecuted Under NI Act: Madras High Court

The Madras High Court on 3 March held that a joint account holder cannot be prosecuted under Section 138 of the Negotiable Instruments Act unless they have signed the cheque in question. Justice G. K. Ilanthiraiyan quashed cheque dishonour proceedings against G. Revathi, a co-accused, pending before the Judicial Magistrate, Puducherry, while directing that the trial continue against the other accused. He held: “In the case on hand, admittedly the second respondent herein alone signed the...

Supreme Court To Hear Anil Ambani's Plea Against 'Fraud' Tag Over Loans Availed by RCom, ADAG Entities Next Week

The Supreme Court on Wednesday agreed to hear next week a special leave petition filed by Anil Ambani challenging his classification as “fraud” by banks in connection with alleged irregularities of Rs. 31,580 crores involving Reliance Communications and other ADAG entities.Ambani's petition challenges a Division Bench order of the Bombay High Court, which set aside an earlier interim relief granted to Ambani and permitted Bank of Baroda, IDBI Bank, and Indian Overseas Bank to continue...

RBI Issues Trade Relief Measures Amid West Asia Crisis, Allows 450-Day Export Credit Tenor

The Reserve Bank of India on Tuesday issued the Reserve Bank of India (Trade Relief Measures) Directions, 2026 to mitigate the burden of debt servicing brought about by geopolitical tensions caused by the West Asian crisis and to ensure continuity of viable businesses. The directions permit regulated entities to allow an enhanced credit period of up to 450 days for pre-shipment and post-shipment export credit disbursed till June 30, 2026. Further, where dispatch of goods could not take place,...

RBI Imposes ₹31.80 Lakh Penalty On Airtel Payments Bank For Non-Compliance With Disclosure Norms

The Reserve Bank of India on Monday imposed a monetary penalty of Rs 31.80 lakh on Airtel Payments Bank Limited for non-compliance with certain provisions of the directions issued by RBI on “Disclosure in Financial Statements”.The action follows the Statutory Inspection for Supervisory Evaluation conducted with reference to the bank's financial position as on March 31, 2025. Based on the supervisory findings, RBI found non-compliance with its directions and issued a show cause notice to the...

Delhi High Court Quashes Fraud Tag On Reliance Commercial Finance Ex-CEO As SCN Was Not Served

The Delhi High Court on Monday set aside an order declaring a former key official of Reliance Commercial Finance Limited as “fraud” in connection with loans worth over Rs 16,455 crore after noting that the show cause notice issued to him had not been served. A division bench of Justice Prathiba M Singh and Justice Madhu Jain passed the order. The petition was filed by Devang Pravin Mody challenging the Reserve Bank of India's Master Directions on Fraud Risk Management dated July 15, 2024,...

RBI Imposes ₹2.17 Crore Penalty On Three Public Sector Banks For Regulatory Lapses

The Reserve Bank of India recently imposed monetary penalties aggregating to Rs 2.17 crore on three public sector banks, Bank of India, Central Bank of India, and Union Bank of India, after finding non-compliance with various regulatory directions. According to press releases issued on Friday, the penalties were imposed following Statutory Inspection for Supervisory Evaluation conducted with reference to the financial position of the banks as of March 31, 2025, which revealed deficiencies...

Litigant Cannot Claim Right To Privacy To Override Court Orders On Disclosure: Kerala High Court

The Kerala High Court on 25 March held that a bank must comply with court directions and cannot refuse disclosure of account details on privacy grounds, even if a litigant alleges violation of his right to privacy. A Division Bench of Justice Anil K Narendran and Justice Muralee Krishna S dismissed an appeal against the Single Judge's order declining to exercise writ jurisdiction under Article 226 of the Constitution. The Court observed: “In the absence of proper parties in the party array,...

Anil Ambani Moves Supreme Court Against Bombay HC Order Allowing Banks To Continue Fraud Classification Proceedings

Industrialist Anil D. Ambani has moved the Supreme Court challenging the Bombay High Court's February 23 judgment that allowed public sector banks to proceed against him on the basis of a 2020 forensic audit report linked to alleged irregularities in loans taken by Reliance Communications group companies.The special leave petition challenges the Division Bench order, which set aside an earlier interim relief granted to Ambani and permitted Bank of Baroda, IDBI Bank, and Indian Overseas Bank to...

Kerala High Court Sets Aside Banking Ombudsman Order For Failing To Give Reasoned Decision

The Kerala High Court recently set aside an order passed by the Banking Ombudsman rejecting a borrower's complaint over increase in interest rate on a gold loan from 14.5% to 17%, holding that the authority failed to pass a reasoned order despite a specific direction from the Court. A single bench of Justice Harisankar V. Menon was considering a writ petition filed by the borrowers, challenging the Ombudsman's order. The petitioners contended that the rate of interest was increased by the bank...