If a bank has reason to believe any unusual or suspicious transaction in a bank account it can freeze the debit operations of the account without notice to the account holder, as per the directions of the High Court in Abdul Azeez v Union of India [2025:KER:88312].
Subsequently the bank should intimate the matter to the account holder and the law enforcement agencies including cyber police. If any of the authorities do not take action, the bank shall de-freeze the account and allow its operation as usual. If the bank does not freeze the suspicious account, it would be termed as accomplice to the crime.
The High Court in the above case directed the Reserve Bank of India (RBI) to frame guidelines in this regard under Section 35A of the Banking Regulation Act 1949 as existing RBI guidelines do not directly authorize banks to freeze any subscriber’s bank account.
The High Court directions will remail in force till the RBI frames proper guidelines in this regard.
