Page 20 - Banking Finance September 2025

LEGAL UPDATE

RBI Mandates Domain Mi-

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The Reserve Bank of India (RBI) has
directed all regulated financial entities,
including banks and NBFCs, to migrate
their websites and digital platforms to Ò»©­
the ".IN" or ".BHARAT" domain by July
2025. The move aims to enhance digi-
tal trust, security, and compliance
among financial institutions. The RBI
stated that entities using generic top-
level domains like ".com" or ".org"
must transition to ensure better moni- term ends, unless a clear and lawful
toring and localization of financial ATM Glitch: Banks Or- agreement supports it. The judgment
data. dered to Compensate emphasized that employment bonds
It also instructed entities to host their Consumer Rs. 15,000 must be reasonable, legally enforce-
websites and related digital infrastruc- An Ahmedabad-based consumer forum able, and cannot override fundamen-
ture within India. This strategic shift is has directed two major banks to pay tal rights or service rules.
expected to align India’s financial eco- Rs. 15,000 in compensation to a cus- The case involved an employee whose
system with national cybersecurity tomer who was wrongfully charged Rs. premature resignation led the bank to
goals and bolster consumer trust in 4,000 due to an ATM malfunction. The withhold dues. The Court held that
digital transactions. Institutions failing complainant had attempted a cash unless actual training costs or damages
to comply may face regulatory actions.
withdrawal in July 2021, but the ma- are proven, employers cannot penalize
Belgian Court Denies Bail chine did not dispense any money employees merely for early resigna-
while the amount was debited. tion. This ruling is expected to guide
to Mehul Choksi in PNB future employment disputes and high-
Despite multiple complaints, the
Scam Case amount was not reversed. The forum lights the balance between organiza-
tional needs and individual freedoms.
A Belgian court has denied bail to observed negligence and a lack of
Mehul Choksi, a key accused in the timely redressal, ordering both banks— Retired Law Clerk Falls
?13,000 crore Punjab National Bank where the ATM was hosted and where Victim to ‘Digital Arrest’,
(PNB) scam, citing his history of evad- the customer held an account—to
ing legal proceedings. Choksi, who fled jointly pay the compensation. The deci- Loses Rs. 88 Lakh
India in 2018 and acquired citizenship sion emphasizes accountability in digi- A retired law clerk from Rajkot has
in Antigua and Barbuda, was arrested tal banking services and the importance reportedly lost ?88 lakh after being
in Belgium earlier this year on India’s of consumer grievance mechanisms. duped in a ‘digital arrest’ scam, where
request. fraudsters impersonated police and
The court ruled that his past attempts SC Clarifies Rules on Pre- government officials. The caller
to escape law enforcement made him mature Resignation in claimed that a parcel linked to illegal
a flight risk. Indian authorities are ac- activities was found in the victim’s
tively pursuing his extradition to face Employment Contracts name and threatened immediate ar-
trial. The denial of bail strengthens The Supreme Court, in Vijaya Bank vs rest unless a hefty penalty was paid.
India’s case, which alleges that Choksi Prashant Narnaware, has ruled that In panic, the victim transferred the
and his associates orchestrated a an employer cannot unilaterally deduct amount over several transactions. The
large-scale fraud using forged LoUs salary or enforce bond conditions if an Rajkot cybercrime unit is investigating
(Letters of Undertaking). employee resigns before the contract the case.

18 | 2025 | SEPTEMBER | BANKING FINANCE