<h1>Banks' move to label industrialist and telecom loan accounts as 'fraud' stayed over disputed forensic audit and RBI rules</h1> Three public sector banks appealed a December 2025 single-bench interim order that stayed all present and future steps to classify an industrialist's and a telecom company's loan accounts as 'fraud.' The stay was granted on findings that the banks' action relied on a legally flawed forensic audit and breached mandatory RBI guidelines, with the operative effect of suspending show-cause notices and restraining coercive measures pending adjudication. In appeal, the banks contend the forensic audit was legally valid and supported by findings of fund siphoning and misutilisation, and seek quashing of the interim order as perverse, which would permit the banks to resume fraud-classification proceedings. The matter was listed for further hearing on January 14.