Allahabad High Court Dismisses PIL Challenging Bank Branch Relocation

Court finds compliance with RBI guidelines; petitioner’s concerns over branch name and correspondent addressed

In a recent decision, the Allahabad High Court dismissed a Public Interest Litigation (PIL) filed by Lal Bahadur Patel against the Union of India and others, concerning the relocation of an Indian Bank branch. The petitioner had challenged the bank's decision to move its branch from Banka Jalalpur to Sultanpur Khas, citing the lack of requisite permission from the Reserve Bank of India (RBI) under Section 23(1)(a) of the Banking Regulations Act, 1949.

The Division Bench, comprising Chief Justice Arun Bhansali and Justice Kshitij Shailendra, heard arguments from both sides. The petitioner contended that the branch relocation was unauthorized without direct RBI approval. However, the respondents argued that the necessary approval was obtained from the District Consultative Committee (DCC) as per a circular issued under Section 35-A of the Banking Regulations Act, thus negating the need for separate RBI permission.

In its judgment, the court noted the submission by the Reserve Bank of India, which clarified that a circular dated May 18, 2017, concerning the Rationalisation of Branch Authorisation Policy, allows such relocations without explicit RBI approval if DCC approval is obtained. The court further observed that the statutory provisions under Section 23(3) of the Act empower the RBI to impose conditions generally or for specific cases, and the circular effectively addresses these circumstances.

Additionally, the petitioner's concerns regarding the branch continuing to use the old name, Banka Jalalpur, and the non-disclosure of a business correspondent were also addressed by the respondents. The court was informed that the branch name had been updated to Mau Aima as of December 2, 2025, and a business correspondent had been appointed with documented evidence.

Concluding that the reliefs sought by the petitioner had been satisfied, the court found no further orders necessary, thereby disposing of the petition.

Bottom Line:

Banking Regulations Act, 1949 - Shifting of a bank branch - Requirement of Reserve Bank of India (RBI) permission - Compliance with Circular issued under Section 35-A of the Act - Petition dismissed as reliefs sought were satisfied.

Statutory provision(s): Banking Regulations Act, 1949 Section 23(1)(a), Section 35-A

Lal Bahadur Patel v. Union of India, (Allahabad)(DB) : Law Finder Doc Id # 2822162