The Lucknow bench of the Allahabad High Court has ordered the State Bank of India (SBI) to refund ₹19.90 lakh that was improperly deducted from a widow’s fixed deposit account. The funds were taken to recover a personal loan that had been taken out by her deceased husband. The court characterized the bank’s actions as an “abominable” violation of standard banking practices, highlighting the need for adherence to ethical financial procedures.
A division bench of Justice Shekhar B Saraf and Justice Abdhesh Kumar Chaudhary also ordered SBI to pay Rs 1 lakh as exemplary and punitive compensation, citing the manner in which the dues were recovered.
Her husband, an assistant professor at Medicine Hospital on Ring Road in Lucknow, had taken a Rs 15 lakh personal loan from SBI in Nov 2020. He died of Covid-19 in May 2021. The court noted that the loan was covered by an insurance policy for which a premium of Rs 8,803 was allegedly paid. SBI issued a legal notice to her in Sept 2025 seeking repayment of the outstanding Rs 13.87 lakh and later froze her salary account, which was restored after intervention by RBI Ombudsman. During discussions, SBI encashed her fixed deposit and debited Rs 19.90 lakh after transferring the FD from the Aashiana branch to Jankipuram, where the loan was processed, and then shifting it back.
You Can Also Check: Gold Rate in Lucknow | Silver Rate in Lucknow | Bank Holidays in Lucknow | Public Holidays in Lucknow | Lucknow AQI | Weather in Lucknow | Petrol Price in Lucknow | Diesel Price in Lucknow | CNG Price in Lucknow | LPG Price in Lucknow Stay updated with the latest Lucknow news. The order came while allowing a writ petition filed by Neha Mishra. The bench recorded that Mishra was neither a co-borrower nor a guarantor, surety, indemnifier or nominee, and that there was no privity of contract between her and the bank. The bench ordered refund with interest at the FD rate and payment of compensation within four weeks. Download the TOI App.