Allahabad HC: Banks must freeze only disputed amount, not entire account in cyber fraud cases

The Allahabad High Court has ruled that banks cannot freeze an entire account during cyber fraud investigations, as was the case in a dispute involving Rs 36,000. The court directed that only the specific amount under scrutiny should be blocked, leaving the account holder access to remaining funds. The bench stressed the importance of clear communication between banks and customers whose accounts are partially frozen. Banks are now required to inform affected customers about available grievance redressal mechanisms. The directive seeks to balance the needs of ongoing fraud investigations with the legitimate financial rights of individuals.