Every violation of RBI fraud rules not open to court scrutiny: Bombay High Court on lifting Anil Ambani case stay

Bombay High Court rules RBI fraud violations aren't open to judicial review, lifting stay on Anil Ambani's account classification.

The RBI's Master Directions aim to identify frauds and unscrupulous borrowers for timely action, and every violation of the same is not subject to judicial scrutiny, the Bombay High Court has said while lifting the stay on action by three banks to classify industrialist Anil Ambani's accounts as fraud.

A Bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad on Monday (February 23, 2026) quashed a single Bench order of December 2025, which stayed the action initiated by three public sector banks based on the Master Directions issued by the RBI to classify Mr. Ambani's and Reliance Communications Ltd.'s bank accounts as fraud.

The Court allowed appeals filed by the three public sector banks and the auditor firm BDO India LLP against the December 2025 interim order passed by a single Bench of the HC. The Division Bench held the single Bench order as "perverse and illegal" and in breach of natural justice and said it suffers from "procedural irregularity and impropriety".

The Court in its judgment, which was made available on Tuesday (February 24, 2026), said the Master Directions issued by the Reserve Bank of India (RBI) cannot be interpreted in a different manner so as to cause prejudice to the lender banks and harm their interest.

Also read: ED issues fresh summons to Anil Ambani for February 26

It added that the issue was of public importance and concerned the financial system in the country and hence grant of an interim stay in such a matter was "patently illegal". Based on the facts of the case, it is not difficult to arrive at a conclusion that "no irreparable injury" would be caused to Mr. Ambani if the proceedings against him are continued, the judgment noted.