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...

RBI Tweaks Reference Date For Fortnightly Reporting By Scheduled Banks

The Reserve Bank of India has tweaked the cut-off date for fortnightly reporting by scheduled banks, without changing the reporting frequency itself. The change has been brought by the notification of the Reserve Bank of India Scheduled Banks' (Amendment) Regulations, 2025.Banks, which were already filing returns on a fortnightly basis, will now report their statement of position as on the last day of the fortnight, instead of the earlier practice of reporting figures as on a Friday. The change...

RBI Issues New Internal Ombudsman Rules For Credit Bureaus, NBFCs And Prepaid Payment Companies

The Reserve Bank of India has rolled out a fresh set of rules that make it mandatory for several financial sector players to appoint an internal ombudsman, a senior, independent official who will review certain customer complaints before they are finally rejected. Through three separate notifications issued on January 14, 2026, the RBI notified the Internal Ombudsman Directions for Credit Information Companies, eligible Non-Banking Financial Companies, and large non-bank Prepaid Payment...

Secured Creditors Must Act Speedily After SARFAESI Notice; Delay Defeats Law's Purpose: MP High Court

The Madhya Pradesh High Court has held that once a secured creditor initiates recovery proceedings under the SARFAESI Act, it must act without delay, failing which the very purpose of the law stands defeated. A division bench of Justice Vivek Rusia and Justice Pradeep Mittal, while dismissing a review petition filed by Cent Bank Home Finance Ltd, observed that lenders cannot remain inactive after issuing a demand notice under Section 13(2) of the SARFAESI Act. “After initiating the proceedings...

Bank's Right To Recover Becomes Absolute Once Demand Notice Is Served In Borrower's Lifetime, Fresh Notice To Legal Heirs Not Needed: Kerala HC

The Kerala High Court, in a recent judgment, held that the statutory right of a bank to recover dues from a borrower under the SARFAESI Act becomes absolute once the demand notice is duly served during his lifetime and the mandatory 60-day period expires without the liability discharged.There was no need for the bank to issue fresh notices under the Act for the legal heirs of the deceased borrower, it was held.Justice Basant Balaji was considering a plea preferred by the legal heir of a deceased...

Bank Cannot Unilaterally Withdraw Money From Joint Account To Recover Loan Owed By One Of The Holders: Orissa High Court

The Orissa High Court has recently ruled that a bank cannot unilaterally withdraw money from a joint account to recover a loan owed by only one of the account holders. The Court was dealing with a petition filed by Bharat Chandra Mallick, a retired railway employee, who challenged the State Bank of India's deduction of Rs 5 lakh from a joint account he held with his wife without prior notice. The deduction was made towards a loan owed by his wife. A bench of Justice Sanjeeb K Panigrahi in...

Kerala High Court Orders Bank To Return Loan Defaulter's Pet Cat Stranded Inside Seized House

The Kerala High Court recently passed an interim order directing the State Bank of India to return to the loan defaulter his pet cat, which was trapped inside his house over which the bank had taken possession.The petitioner submitted before Justice Mohammed Nias C.P. that his cat was stuck inside the house, the secured asset, over which the bank had taken possession.In the plea, the petitioner had prayed to stay all loan recovery proceedings against his residence.The Court observed:"In...

[Article 226] Writ Courts Can't Command Banks To Not Cancel One Time Settlement Facility Granted To Customers: Kerala High Court

The Kerala High Court has held that a party cannot invoke the writ jurisdiction under Article 226 of the Constitution to seek a direction to a bank not to cancel the OTS (One Time Settlement) facility granted to it.The appellant had approached the Single Bench seeking a writ of mandamus against Indian Overseas Bank not to cancel the OTS facility and to consider favourably their request to extend the timeline granted in the facility. The writ petition was disposed of directing the bank to...

Kerala High Court Imposes Cost On Bank For Illegally Retaining Client's Documents After Closure Of Loan

The Kerala High Court, in a decision by Justice Bechu Kurian Thomas, has imposed costs on the South Indian Bank, Aluva Branch, for the illegal retention of documents after the closure of the loan.The petitioner and her husband had taken a loan from the bank in 2009. The bank acknowledged the deposit of four title deeds by the petitioners as security for the housing loan availed from them. The documents, which included two exchange deeds, a release deed, and a sale deed, all of the Aluva Sub...

Insured Cannot Assume Obligation On Part Of Bank To Renew Policy: NCDRC

The National Consumer Disputes Redressal Commission, presided by AVM J. Rajendra overruled the State Commission's order against SBI and held that the insured cannot assume obligation on the bank's part to renew the policy unless agreed otherwise. Brief Facts of the Case The complainant and his mother took a cash credit loan of Rs. 3,00,000 from SBI/bank, pledging shop stock, machinery, furniture, and 27.3 cents of jointly owned land as security. Later, they availed an additional Rs....

Borrowers Breaching Terms & Conditions Of OTS Scheme Cannot Seek Direction From Court To Compel Bank To Honour Obligations: Kerala High Court

The Kerala High Court has held that borrowers who breach the terms and conditions of the One Time Settlement (OTS) Scheme, cannot be permitted to seek directions from the Court to compel the bank to honour its obligations under the OTS Scheme.The present appeals were filed by the State Bank of India, aggrieved by the orders in the writ petitions where benefits under the OTS Schemes were given to the respondents despite making lapses in discharging their obligations under the Scheme.The...

Banks Cannot Be Held Liable For Cyber Frauds Where The Fraud Occurred Due To Negligent Acts Of The Complainant: Goa State Commission

The Goa State Consumer Disputes Redressal Commission has held that HDFC bank cannot be held liable for cyber fraud when the said fraud happened due to negligent acts of the complainant. A coram of Officiating President Mrs. Varsha R Bale and Member Ms. Rachna Gonsalves expressed concerns regarding the increase in cyber frauds and emphasized on the need to have a robust digital infrastructure for detecting such fraudulent acts. Brief Background: The complainant is an account holder...