The Supreme Court has upheld the RBI's 'Master Directions' on fraud classification, ruling that banks are not legally required to grant borrowers a personal hearing before declaring an account as fraudulent. This decision prioritizes administrative expediency and protection of public money over individual procedural rights, impacting banking and legal processes for loan defaults.
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- ›Bench of Justices: J B Pardiwala and K V Viswanathan
- ›Key Regulatory Framework: RBI Master Directions
- ›Target this Legal Principle: Principles of Natural Justice (Audi alteram partem) in administrative actions.
- ›Target this Nodal Body: Reserve Bank of India (RBI) and its 'Master Directions'.
- ›Target this Judicial Outcome: Supreme Court overruled High Courts, denied personal hearing but mandated sharing of forensic audit report.
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