He stressed that financial institutions cannot deny citizens access to their funds without legal authorization.
ISLAMABAD:
In a major ruling aimed at protecting banking customers, the Islamabad High Court (IHC) has ordered banks not to block or freeze bank accounts of citizens without a verified legal basis.
Justice Arbab Muhammad Tahir issued this order after hearing a case in which a citizen challenged the unilateral blocking of his bank account by a private bank during an investigation by the National Cyber Crime Investigation Agency (NCCIA).
According to the six-page written judgment, the court imposed a fine of Rs 300,000 on the private bank after it admitted to blocking the customer’s account without proper justification. It also ordered the bank to pay litigation expenses incurred by the account holder in taking legal action against the illegal restriction.
The court held that banks cannot block or freeze customer accounts without a verified legal reason. He emphasized that financial institutions must act strictly within the limits of the law and cannot deny citizens access to their funds without legal authorization.
In its ruling, the court also directed the State Bank of Pakistan (SBP) to take measures to prevent citizens from being adversely affected by unjustified account blocking in the future.
The court directed the central bank to review the present case and consider issuing comprehensive guidelines for all banks operating in the country.
These guidelines should clearly define the circumstances under which an account can be restricted and ensure that customers are not deprived of access to their accounts without legal justification, he said.
The court ordered that any precautionary directive issued by the SBP should explicitly state that people cannot be stopped from using their bank accounts unless there is a valid and legally supported reason to do so.
