India mandates banks to issue fraud notices: report

The time allotted to respond should not be less than 21 days.

India’s central bank has asked banks to give defaulting borrowers time to respond before branding them as fraud accounts, reports Reuters, following a Supreme Court judgement.

Banks will now have to issue a show-cause notice to fraudulent entities, with complete details of the fraud, the Reserve Bank of India said in a statement posted on its website.

The time allotted should be not less than 21 days. 

The amendment incorporates a Supreme Court judgment in March 2023 stating that banks cannot declare an account as fraud without providing the defaulter the right to be heard.

Earlier this year, the RBI rolled out two online platforms aimed at enhancing online regulatory and investment processes, as well as two repositories for fintechs and emerging technologies.

Banks in India are also slated for improved profit or hold a positive outlook thanks to the country’s strengthening economy, according to analysts.

Here’s more from Reuters: