Kerala HC Dismisses Challenge To Kerala Co-operative Laws, Says Co-op Banks Not Outside Banking Regulation

The Kerala High Court has dismissed a plea seeking to strike down the Kerala Co-operative Societies Act, 1969 and the Kerala State Co-operative Agricultural Development Banks Act, 1984, rejecting a challenge to the legal framework governing co-operative banks and holding that they do not operate outside the banking regulatory regime. The petitioner had argued that the Acts unlawfully exclude the jurisdiction of civil courts and vest adjudicatory powers in arbitrators, thereby depriving citizens...

RBI Exempts NBFCs With Assets Below ₹1,000 Crore Without Public Funds Or Customer Interface From Registration

The central bank’s amendment to the Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation Directions, introducing the changes, will come into effect from July 1, 2026

Karnataka High Court Upholds DICGC's Priority Right To Recover Depositor Payouts From Insured Banks

The Karnataka High Court has upheld the law allowing the Deposit Insurance and Credit Guarantee Corporation (DICGC) to recover amounts paid to depositors directly from a failed bank, with priority over other liabilities, ruling that the premium charged need not be proportionate to the insured amount. A Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Poonacha dismissed a writ appeal filed by a depositors' society (Sangha) arising from the collapse of Sri Guru Raghavendra Sahakara...

RBI Imposes ₹80 Thousand Penalty On Muthoot Housing Finance For Fair Practice Code Violation

The Reserve Bank of India has imposed a monetary penalty of Rs. 80,000 on Muthoot Housing Finance Company Limited for non-compliance with RBI directions on the Fair Practice Code.The penalty was imposed by an order dated April 21, 2026. The action follows a statutory inspection conducted by the National Housing Bank with reference to the company's financial position as of March 31, 2025, which revealed regulatory lapses.RBI found that the company had failed to disclose the approach for gradation...

RBI Imposes ₹41.80 Lakh Penalty On Bandhan Bank For KYC, Regulatory Lapses

The Reserve Bank of India has imposed a monetary penalty of Rs.41.80 lakh on Bandhan Bank Limited for contravention of provisions of the Banking Regulation Act, 1949 and non-compliance with certain directions on Know Your Customer. The penalty was imposed by an order dated April 21, 2026. The action follows the Statutory Inspection for Supervisory Evaluation conducted with reference to the bank's financial position as on March 31, 2025, which revealed supervisory findings of non-compliance. ...

RBI Cancels Paytm Payments Bank Licence, Cites Harm To Depositors' Interests

The Reserve Bank of India (RBI) on Friday cancelled the banking licence of Paytm Payments Bank Limited, citing serious regulatory breaches and conduct that it said was harmful to depositors' interests. With the cancellation taking effect from the close of business on April 24, 2026, the bank is barred from undertaking any banking activity as defined under Section 5(b) of the Banking Regulation Act, 1949, or any additional business under Section 6, with immediate effect. The regulator said it...

Banks Must Halt Online Money Game Transactions On Regulator's Direction Under Online Gaming Rules, 2026

Banks and payment intermediaries will be required to suspend or block transactions linked to online money games when directed by the regulator, under the Online Gaming Rules, 2026.The Rules were notified by the centre on Wednesday.Rule 19(2) says that once the Online Gaming Authority issues directions in respect of an online money game, banks, financial institutions, and entities facilitating transactions must suspend, restrict, or close such transactions and stop authorising funds tied to those...

Bombay High Court Upholds RBI's 2019 Stressed Assets Framework, Finds No Arbitrariness

The Bombay High Court recently upheld the Reserve Bank of India's June 7, 2019 circular on the Prudential Framework for Resolution of Stressed Assets, refusing to interfere with the policy decision that repealed multiple earlier restructuring circulars. The court found no arbitrariness in the RBI's decision to withdraw earlier schemes, including those relating to corporate debt restructuring, restructuring of advances by banks, and restructuring of dues of small and medium enterprises, holding...

Bombay High Court Reads Down RBI 5-Year Ban On New Venture Funding For Wilful Defaulters After NPA Settlement

The court held the five-year embargo cannot continue unless it is established that the borrower is guilty of fraud or has siphoned or diverted funds.

RBI Approval Needed To Enforce Foreign Decree Where FERA Regime Applies: Supreme Court

The Supreme Court of India on Tuesday clarified that enforcement of a foreign decree arising from a transaction governed by India's foreign exchange regulatory regime would require prior approval of the Reserve Bank of India (RBI), where such approval is mandated under the governing statutory framework. A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe held that while there is no prohibition on the initiation of proceedings or determination of liability based on a foreign decree,...

Hypothecation Agreements Attract Stamp Duty As General Agreements, Not Pledge Or Mortgage: Kerala High Court

The Kerala High Court has held that a hypothecation agreement executed to secure a loan attracts stamp duty as a general agreement under Article 5(g) of the Kerala Stamp Act and not as a pledge or mortgage, which attracts higher duty. Clarifying the position, the court said Article 6 of the Act applies only to pledges. “Article 6 of the Act will get attracted only if the instrument in question is a 'pledge'. On a conspectus reading of the agreement of hypothecation, it is evident that the...

Bombay High Court Quashes Union Bank's Wilful Defaulter Tag Against Former Promart Director

The Bombay High Court has recently quashed the Union Bank of India's decision declaring Punit Agarwal, a former director of Promart Retail India Pvt. Ltd., a willful defaulter in relation to credit facilities of about Rs. 40 crores, holding that the action violated the RBI Master Circular on Wilful Defaulters dated July 1, 2013 and principles of natural justice.A Division Bench of Justices Bharati Dangre and Manjusha Deshpande held that the mechanism adopted by the bank was contrary to the law...