2 min readNew DelhiApr 8, 2026 03:25 AM ISTThe court was hearing appeals by SBI and BoI challenging various HC rulings which asked banks to grant borrowers personal hearing before classifying their accounts as “fraud” and to provide the entire forensic audit report.IN A significant decision, the Supreme Court Tuesday ruled that account holders/ borrowers have no legal right to a personal/ oral hearing before the account is declared or classified as “fraud” by the bank as per the RBI’s “Master Directions”.A bench of Justices J B Pardiwala and K V Viswanathan said: “We are persuaded to accept the stand of the RBI that the procedure of issuing a show-cause notice, furnishing of the evidentiary material, eliciting a reply and the obligation to pass a reasoned order will meet the requirements of fairness and also thwart miscarriage of justice.”Justice Viswanathan, writing for the bench, said: “The RBI considering the fact that frauds in accounts are of various hues has opined that granting a right of personal hearing to each and every borrower would be practically inexpedient considering a large volume of cases that have already arisen.”The SC said, “Oral hearing is bound to convert an administrative process, which was intended to be swift, into a protracted one, defeating the very purpose of the exercise… It will also put public money in jeopardy as borrowers will continue to enjoy exposures from banks.” The ruling said “logistically also, it will seriously encumber working hours of the bank officials.The court was hearing appeals by SBI and BoI challenging various HC rulings which asked banks to grant borrowers personal hearing before classifying their accounts as “fraud” and to provide the entire forensic audit report. Overruling the HC decisions, the apex court, however, said the banks should supply the account holder the forensic audit report. © The Indian Express Pvt LtdTags:supreme courtAdvertisementLoading Recommendations...