Bombay HC Slams Yes Bank
Yes Bank Fined for Aadhaar Misuse
• HC Slams Yes Bank
• Aadhaar Not Mandatory, Rules Court
Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098
The Bombay High Court has ordered Yes Bank to pay ₹50,000 compensation to a Mumbai-based company for unlawfully insisting on Aadhaar to open a bank account, violating a Supreme Court ruling. The delay caused rental losses, prompting judicial intervention. Sprouts News Investigation Team (SIT) tracked the case’s legal and regulatory lapses.
Yes Bank Violated Supreme Court Order on Aadhaar
In a significant ruling, the Bombay High Court has directed Yes Bank to pay ₹50,000 in compensation to a Mumbai-based company after the bank unlawfully denied the opening of a current account for want of an Aadhaar card. The denial came despite a landmark Supreme Court judgment in Justice K.S. Puttaswamy (Retd.) vs. Union of India, which had held on September 26, 2018, that Aadhaar is not mandatory for opening bank accounts.
The Division Bench of Justices M S Sonak and Jitendra Jain took strong exception to the bank’s conduct, noting that the petitioner company had suffered economic loss, including being unable to lease its commercial property in Mumbai due to the absence of a functioning bank account.
“From 26th September 2018 onwards, there was no impediment to the Respondent-Bank opening the account without insisting on the Aadhaar Card,” the Court observed, siding with the petitioner’s counsel and pointing to blatant non-compliance with the Supreme Court’s direction.
Click Here To Download the News Attachment
Dispute Originated in 2018 Despite Interim SC Relief
The conflict began in January 2018, when the petitioner company approached Yes Bank to open a current account. The bank categorically refused, insisting that Aadhaar was a mandatory document. Even after the Supreme Court issued interim orders clarifying that Aadhaar was not essential for account opening, Yes Bank doubled down, reiterating its position in written communication issued in April 2018.
The petitioner highlighted that the delay caused financial distress to the family of the deceased founder-director. His widow and unmarried daughter were dependent on the rental income from the company’s commercial premises, which remained unleased due to the bank’s refusal to open the account.
The petition demanded ₹10 lakh in compensation, citing a rental loss of ₹1.5 lakh per month over the year. However, the Court found the compensation figure exaggerated but admitted that substantial harm was caused due to regulatory non-compliance by Yes Bank.
Court Criticizes Bank’s Inaction, Awards Damages
The High Court, while acknowledging that compensation claims can be pursued through civil remedies, chose not to relegate the petitioner to an alternate forum. Instead, it directly awarded ₹50,000 as a token compensation for the unjust denial of service.
“In a matter of this nature, we would have ordinarily relegated the petitioner to alternate remedies. However, considering these peculiar circumstances… we do not relegate the petitioner to the ordinary remedies,” the bench stated.
The Court also took into account that Yes Bank had failed to respond to the petitioner’s compensation notice even when an opportunity was provided back in 2018. The ₹50,000 compensation must be paid within eight weeks.
Also Read: Motilal Oswal (MOFSL) Harassment Scandal: Fake ICC, Legal Manipulation & Cover‑Up.
Aadhaar Not Mandatory for Bank Accounts Post-2018
This judgment reinforces the constitutional validity of the Supreme Court’s Aadhaar ruling. The 2018 verdict held that while Aadhaar could be mandated for PAN and income tax filings, it could not be made compulsory for private services, including bank account operations.
The Sprouts News Investigation Team (SIT) has earlier reported on similar systemic lapses by financial institutions continuing to demand Aadhaar in contravention of legal mandates. This latest case brings renewed focus on poor compliance by banks and the absence of internal checks within private sector institutions like Yes Bank.
Broader Implications for Banking Sector and Regulatory Compliance
The case sets a significant precedent in consumer rights enforcement and reiterates the liability of banks when failing to comply with judicial orders. It also serves as a cautionary note for financial institutions to align operations with constitutional and legal safeguards.
Further, Sprouts News Investigation Team (SIT) recommends that the Reserve Bank of India (RBI) issue a clear compliance advisory reiterating the non-mandatory status of Aadhaar for bank accounts, with penal provisions for repeated violations.
As the Indian banking ecosystem becomes increasingly digitized and privacy-centric, the enforcement of Supreme Court guidelines remains critical. The Sprouts SIT will continue tracking banking rights, digital compliance, and citizen grievances impacting financial inclusion.
