Banks will have to set down a proper process, including a platform to hear the views of borrowers and accounts labelled as a fraud, even after a forensic audit finds such delinquents guilty of embezzlement.
Bankers and lawyers said that though the process to declare a fraudulent account may get elongated after the Supreme Court verdict, a detailed standard operating procedure (SoP) will eventually eliminate legal hurdles in the future. On Monday, a two-judge bench of Chief Justice of India DY Chandrachud and Justice Hima Kohli said that borrowers must be heard before their accounts are classified as fraud, upholding a Telangana High Court order against an appeal by State Bank of India (SBI).
