Lucknow, May 4 -- The Lucknow bench of the Allahabad High Court has cautioned banks against the arbitrary freezing of customer accounts, stating that financial institutions act as trustees and not investigative agencies.
While hearing a petition filed by M/s SA Enterprises, a firm engaged in fishery machinery, a division bench comprising Justice Shekhar B. Saraf and Justice Avadhesh Kumar Chaudhary imposed a cost of Rs 50,000 on Indian Overseas Bank for freezing the companys account without valid legal grounds.
Account Freeze Linked to Suspicious Transaction
The case arose after the firms account was frozen following a Rs 23 lakh RTGS transaction received on January 16, 2026, which the bank flagged as suspicious.
The bank cited a ...