The Islamabad High Court (IHC) has delivered a landmark judgment protecting banking customers, directing banks not to block or freeze citizens' accounts without a verified legal basis. Justice Arbab Muhammad Tahir issued the order while hearing a case where a citizen challenged the unilateral blocking of his account by a private bank during an inquiry by the National Cyber Crime Investigation Agency (NCCIA).
Court Imposes Fine on Private Bank
According to the six-page written judgment, the court imposed a fine of Rs300,000 on the private bank after it admitted blocking the customer's account without proper justification. The bank was also ordered to pay the litigation expenses incurred by the account holder in pursuing legal action against the unlawful restriction.
Key Rulings
The court held that banks cannot block or freeze customers' accounts in the absence of a verified legal reason. It emphasized that financial institutions must act strictly within the bounds of the law and cannot deny citizens access to their funds without lawful authority.
Directions to State Bank of Pakistan
The court directed the State Bank of Pakistan (SBP) to take measures to prevent citizens from being adversely affected by unjustified account blockages in the future. It instructed the central bank to review the present case and consider issuing comprehensive guidelines to all banks operating in the country. These guidelines should clearly define the circumstances under which an account may be restricted and ensure that customers are not deprived of access to their accounts without legal justification. The court ordered that any precautionary guidelines issued by the SBP should explicitly state that individuals cannot be prevented from using their bank accounts unless there is a valid and legally supported reason for doing so.
