https://www.taxtmi.com/caselaws?id=303134 A bank cannot reduce a borrower's drawing power or classify the account as NPA without first giving notice and an opportunity to explain, because such action has civil consequences and must comply with audi alteram partem. Temporary deficiencies such as inadequate drawing power, delayed stock statements, excess outstanding, or pending renewal do not by themselves justify NPA classification under RBI prudential norms. An NPA classification is not irreversible; where arrears of principal and interest are cleared or deficiencies are regularised, the account may be restored to standard status. The impugned classification and consequential action were set aside and the matter was remitted for fresh decision in accordance with the applicable norms. en-us Fri, 17 May 2019 00:00:00 +0530 Wed, 06 Jul 2022 00:18:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=303134 A bank cannot reduce a borrower's drawing power or classify the account as NPA without first giving notice and an opportunity to explain, because such action has civil consequences and must comply with audi alteram partem. Temporary deficiencies such as inadequate drawing power, delayed stock statements, excess outstanding, or pending renewal do not by themselves justify NPA classification under RBI prudential norms. An NPA classification is not irreversible; where arrears of principal and interest are cleared or deficiencies are regularised, the account may be restored to standard status. The impugned classification and consequential action were set aside and the matter was remitted for fresh decision in accordance with the applicable norms. Case-Laws Indian Laws Fri, 17 May 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=303134