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New Delhi: If you do transactions with the bank or have taken a loan from the bank, then this news is very important for you. The Supreme Court, while giving a major decision on Tuesday, has made it clear that if the bank wants to declare an account as ‘fraud’, then there is no need to personally call the borrower and hear it (personal hearing). This decision of the court will give more speed to the banks in taking action against defaulters and fraudsters.

Personal hearing is not necessary, only notice is enough

A bench of Justices JB Pardiwala and KV Vishwanathan has quashed the earlier order of the Calcutta High Court, which had said that before declaring the account as fraud, the borrower should be given an opportunity to present his views orally. The Supreme Court clarified that in law, merely giving notice and taking the borrower’s response on it is sufficient. The Court believes that face-to-face hearing in every case slows down the process, which gives fraudsters an opportunity to hide their assets.

It will be mandatory to provide copy of audit report

However, the court has also laid down an important condition to protect the rights of the borrowers. The bench said that if the bank is planning to declare the account as a fraud on the basis of any forensic audit report, then it will be mandatory to give a copy of that report to the borrower. The bank should seek a written response from the borrower on that report. The court said that for the safety of the banking system and the public’s hard-earned money, it is necessary that action in fraud cases be taken as soon as possible and on the basis of correct facts.

Citing RBI rules and old decisions

The Supreme Court agreed with the Reserve Bank of India (RBI) and said that banking fraud cases are mostly based on papers, bank statements and audit reports. Citing the example of ‘SBI vs. Rajesh Aggarwal’ case, the bench made it clear that even at that time personal hearing was not made mandatory. According to the court, following the prescribed procedure will ensure justice and maintain transparency in the banking system.

Another big decision: SC status will end if religion is changed

With this, the Supreme Court has given another historic decision. The court has made it clear that only people belonging to Hindu, Sikh and Buddhist religions can get Scheduled Caste (SC) status and its benefits. If a person converts to Christianity or any other religion, his Scheduled Caste status will automatically be lost.