Banks don’t have jurisdiction to issue lookout circular against defaulters: Court

Mumbai: The Bombay High Court today ordered that public sector banks do not have the legal authority to issue look out circulars (LOCs) against loan defaulters. All LOCs issued by such banks against defaulters will be cancelled after the court’s decision.

A division bench of Justices Gautam Patel and Madhav Jamdar also termed as unconstitutional the clause of the central government’s office memorandum, which empowered chairpersons of public sector banks to issue LoCs against loan defaulters.