The Reserve Bank of India notified new rules to simplify the settlement of accounts of deceased bank customers, providing relief to families.

The Settlement of Claims in respect of Deceased Customers of Banks Directions issued on September 26, 2025, aim to eliminate inconsistent practices that banks have followed for decades

The rules cover accessing funds, safe deposit lockers, and other articles in custody after a customer’s death. Nominees or survivors need only submit a claim form, death certificate, and proof of identity.

All commercial and cooperative banks have been instructed to implement the rules by March 31, 2026.

The Kerala High Court directed the State Bank of India to return a loan defaulter’s pet cat, which remained locked inside his house after the bank seized the property as a secured asset.

In his plea, the petitioner sought a stay on recovery proceedings initiated against his residence and requested the release of his pet.

The Court noted the urgency of the situation and ordered the immediate handover of the cat to the petitioner.

The Court further directed the bank to file a statement regarding compliance with the order on or before the next date of hearing.

[Muhammed Nishad v State Bank of India and Ors.]

The Supreme Court has ruled that a complaint under Section 138 of the Negotiable Instruments Act is maintainable even for a cash loan exceeding ₹20,000, setting aside the Kerala High Court's contrary judgment.

The apex court clarified that the limitation under Section 269SS of the Income Tax Act (which restricts cash transactions above ₹20,000) does not invalidate the underlying debt or the cheque issued for its repayment.

The NI Act's purpose is to protect the sanctity of negotiable instruments, independent of tax law compliance. The Court also issued elaborate guidelines to trial courts to reduce the backlog of cheque bounce cases.

[Sanjabij Tari v. Kishore S. Borcar & Anr.]

The Delhi High Court has asked the Reserve Bank of India and the Central government to consider the difficulties faced by visually impaired individuals before issuing new currency notes.

As per the RBI, printing notes is usually carried out once every ten years. The court emphasised the need for accessible features that enable the blind to identify denominations independently.

This direction came during a hearing on a petition highlighting the challenges faced by visually impaired citizens in distinguishing between different currency values.

The bench urged authorities to incorporate inclusive design elements to ensure equal access to financial transactions for all citizens.

[Rohit Dandriyal & Ors v. Reserve Bank of India & Anr + Connected matters]

The Supreme Court has clarified that a public notice issued by a bank under the SARFAESI Act extinguishes the borrower’s right to redeem the secured asset under Section 13(8) once the notice period expires.

The court emphasised that publication of the notice marks the cutoff point for repayment and restoration of possession, preventing indefinite delays in recovery proceedings.

The Court noted that the Security of Enforcement Rules provided for different modes of notice for different modes of sale- whether by public auction, tender, or private treaty.

[M. Rajendran & Ors. v M/S KPK Oils & Protiens India Pvt. Ltd & Ors.]

The Supreme Court held that the 2016 amendment to Section 13(8) of the SARFAESI Act applies to all loan defaults occurring after September 1, 2016, even if loans were sanctioned earlier.

The Court rejected borrowers’ claims under the pre-amended law, ruling that redemption rights ended once the auction notice was issued in January 2021.

Citing M.D. Frozen Foods Exports Pvt. Ltd. v. Hero Fincorp Ltd. and Authorised Officer, Central Bank of India v. Shanmugavelu (2024 INSC 80), it stressed SARFAESI’s remedial nature.

The Court clarified that redemption is statutory, not contractual, and urged the Finance Ministry to amend anomalies in Section 13(8) and Rules 8 & 9.

[M Rajendran v M/s KPK Oils and Proteins India Ltd]

The Madras High Court has directed police to register FIRs on 467 complaints linked to a large-scale fake insurance claim racket. Petitioners alleged that agents, in collusion with officials, forged documents to fraudulently settle claims.

The court also recommended forming a Special Investigation Team (SIT) for a comprehensive probe. If the files cannot be traced, a criminal complaint must be lodged, the High Court added.

The bench emphasised the need for a thorough investigation to uncover the entire network and bring the perpetrators to justice.

The matter will be heard next on October 17.

[Cholamandalam MS General Insurance Company v Director General Of Police]

The Rajasthan High Court set aside a Debt Recovery Tribunal’s (DRT) order that rejected a securitisation application (SA) because not all borrowers had signed it.

Justices Anoop Kumar Dhand ruled that when a Vakalatnama is filed by a duly appointed representative and the application is entertained with an interim order, rejecting it later on such a technical ground violates justice. 

The case involved multiple borrowers on a joint loan, where one signed the SA and others signed the Vakalatnama.

The Court directed the DRT to decide the case on merit within two months.

[Kishan Lal Sharma & Ors. v Laxmi India Fineleasecap Pvt Ltd]

The Bombay High Court has held that where there exists an ambiguity in the terms of an insurance policy, the principle of contra proferentem shall be applied to interpret.

The case concerned a writ petition filed by insurance company, TATA AIG General Insurance, against an Insurance Ombudsman award directing payment of ₹27 lakh to a widow whose husband died of a sudden cardiac arrest.

The Court noted that the absence of diagnostic tests could not invalidate a genuine claim and emphasised that insurance linked to housing loans must serve their intended purpose, and rebuked the insurer for acting without bona fides.

[TATA AIG General Insurance Ltd. v Vinay Sah]

The Supreme Court has clarified that the 30-day period under the Negotiable Instruments Act, 1881, for raising a dispute regarding a dishonoured cheque is mandatory.

Any filing beyond this timeline must be accompanied by a formal application explaining the delay, which will be carefully scrutinized by the court.

In the present case, no such application or judicial recording justifying the delay was filed.

Consequently, the Supreme Court set aside the Delhi High Court’s order issuing summons, emphasizing that complaints filed outside the statutory period without explanation cannot be entertained.

[H.S Oberoi Buildtech Pvt. Ltd. and Ors. v M/S MSN Woodtech]

The Allahabad High Court has ruled that every 'One Time Settlement' (OTS) scheme is time-bound and that a borrower has no right to seek an extension beyond the time period mentioned under the scheme.

While dealing with a case where the petitioners had failed to comply with the time-period requirements, the Court held that the Bank cannot be held at fault for cancelling the OTS provided to the petitioners if they do not make the repayment within the prescribed time limit.

It further noted that third-party obligations were already created and that there was no reason to undo the bona fide actions of the Bank.

[M/S Jaharveer Maharaj Agro Pvt. v UOI]

The Supreme Court has agreed to hear a plea seeking directions for Sahara Group to clear over ₹16 crore in pending wages to its employees.

The application was filed in connection with ongoing contempt proceedings in SEBI v. Sahara.

A bench led by Chief Justice B.R. Gavai, with Justices K. Vinod Chandran and Atul S. Chandurkar, was urged to list the matter urgently.

The plea points out that despite repeated court directions, thousands of Sahara employees have been waiting for their dues for years.

[SEBI v Subrata Roy Sahara & Ors.]

The Supreme Court held that cash transactions cannot be disbelieved merely for lack of bank records if credible evidence supports them.

It ruled that courts must assess the totality of circumstances, including witness statements and documents, instead of relying only on banking proofs.

The bench observed that negotiable instruments carry a presumption of validity, which cannot be discarded solely because part of the payment was made in cash.

It stressed that individuals giving money in cash may not always possess documentary evidence, and fairness requires recognising such transactions when sufficiently corroborated.

The Supreme Court ruled that children injured in motor accidents cannot be treated as non-earning individuals when calculating compensation and directed tribunals to assess loss of income based on minimum wages for skilled workers. 

It enhanced compensation for 8-year-old Hitesh Patel, who suffered 90% disability in a 2012 accident, from ₹3.9 lakh to ₹35.9 lakh with 9% interest.

The Court criticised the Gujarat MACT and High Court for ignoring principles laid down in Kajal v. Jagdish Chand (2020), and mandated that insurance companies provide wage data.

The Registrar Judicial was asked to circulate the order to all High Courts and MACTs nationwide.

[Hitesh Nagjibhai Patel Vs Bababhai Nagjibhai Rabari]