Public Sector Banks Can't Issue Look Out Notices Against Defaulters: High Court

The high court's verdict would render all LOCs issued by such banks against defaulters as quashed.

The Bombay High Court today ruled that public sector banks do not have the power in law to issue Look Out Circulars (LOCs) against default borrowers.

The high court's verdict would render all LOCs issued by such banks against defaulters as quashed.

A division bench of Justices Gautam Patel and Madhav Jamdar held as unconstitutional the clause of an office memorandum issued by the central government empowering the chairpersons of public sector banks to issue LOCs against default borrowers.