Cyber fraud probe over Rs 36,000 cannot block entire bank account, says Allahabad HC
The Allahabad high court ruled banks should not fully block accounts during cyber fraud investigations. Only the specific disputed amount should be frozen, allowing access to remaining funds. The court emphasized clear communication channels for customers with blocked accounts. This directive aims to balance investigations with legitimate financial activities of individuals. Banks must now inform…
The Allahabad High Court has ruled that banks should not entirely block a customer's bank account solely based on an investigation into a cyber fraud transaction. The court emphasized that banks should only block the amount being investigated and allow the customer to continue using the rest of their funds. The decision came after a Lucknow-based businessman faced his bank accounts being frozen due to a suspicious transaction of Rs 36,000, which was under investigation by a cybercrime agency outside Uttar Pradesh.
The court directed banks to inform customers about their rights to contest account freezes and appealed to them to exercise restraint when freezing accounts in such cases.
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