FinMin studying Bombay HC order restricting PSBs from seeking look out circulars against wilful defaulters
The Finance Ministry is reviewing the Bombay High Court order banning public sector banks from seeking look-out circulars (LOCs) against wilful defaulters. The court deemed the order arbitrary and violative of a person's fundamental rights. The finance ministry is aware of the judgement and will assess it. The court held that an office memorandum empowering public sector banks to seek LOCs against default borrowers or their guaranteeees was unconstitutional.