Banks could not hold hearing before classifying account as fraud: SC

The Supreme Court on Friday clarified its March 27 verdict, saying it had not directed banks to accord a personal hearing before classifying a borrower's account as fraud.

The clarification came on the plea of State Bank of India which flagged two issues pertaining to the March 27 judgement and said now the NPA account holders, against whom the proceedings were initiated before the verdict, may come and say that stall everything as they were not heard by banks and the hearing should not mean personal hearing.

We never stated that the personal hearing be granted to the borrowers. Rather we had said that they should be given adequate notice and an opportunity to make a representation," a bench comprising Chief Justice D Y Chandrachud and Justices P S Narasimha and J B Pardiwala said.

On the issue of applicability of the verdict with prospective effect, the bench said that a review petition will have to be filed against the judgement by the SBI.

A bench headed by the Chief Justice, on