Overview
- A Karnataka High Court order required IndusInd Bank to confine its debit freeze to the ₹25,000 that probe agencies sought and to allow the account holder to operate the remaining balance.
- The Telangana High Court ordered India Post Payments Bank to defreeze a savings account within two weeks unless a competent lawful freezing order is produced and communicated to the bank.
- Both courts held banks act as custodians, not adjudicators, and said informal alerts, internal emails or anticipatory action do not justify freezing entire accounts.
- Judges directed a proportionate approach: when a freezing direction names a specific sum banks should earmark or place a lien on that amount and keep the rest available to the customer.
- The decisions protect account holders' access to wages and sale proceeds and signal that banks will likely need to change internal freeze protocols while investigators retain the ability to seek lawful orders.