Allahabad High Court orders SBI to refund widow's funds

The Allahabad High Court has ordered the State Bank of India (SBI) to refund ₹19,90,693 to a widow after the bank illegally debited the amount from her fixed deposit to cover her deceased husband's outstanding personal loan. The court also directed the bank to pay ₹1 lakh in compensation.

The court found that the bank had no legal basis to recover the debt from the widow, as she was not a signatory, co-borrower, or guarantor for the loan. Judges described the bank's method of transferring the account between branches to facilitate the debit as an action that “stinks of mala fide” and is “anathema to banking practice.”