Bombay High Court Criticizes Banks Over Fraudulent Account Declarations

The court highlights procedural lapses and directs Anil Ambani to approach RBI for redressal, while urging stricter compliance with RBI guidelines.

The Bombay High Court reprimanded banks for declaring loan accounts as 'fraudulent' without following RBI's mandated guidelines.
The case involves Anil Ambani's Reliance Communications, whose account was classified as 'fraudulent' by Union Bank without granting a hearing.
The court criticized the 'cut, copy, paste' approach by banks and emphasized the need for a structural mechanism to ensure proper procedural compliance.
Anil Ambani has been directed to file a complaint with the RBI, which reviews procedural adherence but does not assess the merits of such cases.
The court has asked the RBI to implement stricter policies and publicize fraud classification guidelines, with the next hearing scheduled for March 13.