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[Landmark Judgement] SBI v/s S.N. Goyal (2008)

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Landmark Judgment Law Insider (1)

Published on: 11 November 2022 at 09:52 IST

Court – Supreme Court of India

Citation – SBI v/s S.N. Goyal (2008) 8 SCC 92

Hon’ble Supreme Court of India has held that bank is based upon the trust of the clients. Hence the employees of the bank are required to be like a Caesar’s Wife. The employees of the bank are expected to act with absolute integrity and honesty in handling the funds of the customers/borrowers of the bank.

Para – 41

At the relevant point of time the respondent was functioning as a Branch Manager. A bank survives on the trust of its clientele and constituents. The position of the Manager of a bank is a matter of great trust. The employees of the bank in particular the Manager are expected to act with absolute integrity and honesty in handling the funds of the customers/borrowers of the bank.

Any misappropriation, even temporary, of the funds of the bank or its customers/borrowers constitutes a serious misconduct, inviting severe punishment. When a borrower makes any payment towards a loan, the Manager of the bank receiving such amount is required to credit it immediately to the borrower’s account.

If the matter is to be viewed lightly or leniently it will encourage other bank employees to indulge in such activities thereby undermining the entire banking system. The request for reducing the punishment is misconceived and rejected.

Drafted By Abhijit Mishra

Key Words – Bank, Borrowers, Misappropriation.