Supreme Court Questions Necessity of Personal Hearings in Bank Fraud Cases

The Supreme Court deliberated on whether bank account holders declared fraudulent need a personal hearing. State Bank of India opposed personal hearings, arguing written submissions suffice under RBI's protocol. Rising fraud numbers in India intensify the debate, with implications for the banking sector and national economy.

The Supreme Court on Tuesday raised questions about the necessity of 'personal hearings' for bank account holders whose accounts have been marked as fraudulent after due diligence by the Reserve Bank of India (RBI) guidelines from 2017.

A bench of Justices JB Pardiwala and KV Viswanathan heard the State Bank of India's plea challenging a Calcutta High Court decision mandating personal hearings in line with natural justice principles. SBI argued that written submissions offer sufficient opportunity for due process.

Solicitor General Tushar Mehta, representing SBI, emphasized that insisting on personal hearings could harm the banks and the regulatory framework's integrity. He noted the increase in banking frauds, with figures provided to illustrate the scale, underscoring the RBI's role in fraud management and which is deemed crucial to the national economy.

(With inputs from agencies.)