The Rajasthan High Court has clarified that banks cannot impose a blanket freeze on a customer’s entire bank account when only a specific amount is under investigation. The ruling came on a writ petition questioning State Bank of India’s decision to freeze the petitioner’s entire account balance.

A bench led by Justice Nupur Bhati ordered that only the funds allegedly received through unlawful means should be restricted, while the account holder must be permitted to carry out transactions with the remaining balance.

The Court emphasized that if the bank has no precise details about the disputed sum, it must request that information from the Investigating Officer or Police. The authorities are then required to disclose the exact figure within 7 days, enabling the bank to mark only that amount under lien.

If the police fail to respond within the prescribed period, the bank is expected to proceed as per this judgment and not keep the entire account frozen.

With these instructions in place, the writ petition was concluded.

Case Title: Sayed Sarfaraj v. Reserve Bank of India & Anr.