Lucknow: The Lucknow bench of Allahabad high court has directed State Bank of India (SBI) to immediately refund Rs 19.90 lakh that it debited from a widow’s fixed deposit to recover a personal loan taken by her deceased husband, calling the bank’s conduct an “abominable” breach of banking practice.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.The order came while allowing a writ petition filed by Neha Mishra. 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.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.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.The bench ordered refund with interest at the FD rate and payment of compensation within four weeks.
