The Islamabad High Court (IHC) has ruled that blocking a citizen’s bank account without a verified legal reason is unlawful, ordering a private bank to pay Rs300,000 in compensation.
The court issued its ruling while deciding a case in which a bank had unilaterally blocked a citizen’s account during an NCCIA inquiry, forcing the account holder to seek judicial relief.
The petitioner informed the court that he had spent Rs300,000 on legal representation and case-related expenses as a direct consequence of the bank’s unjustified and unsanctioned account blockage.
The court ordered the bank to pay Rs300,000 to the petitioner within one month and submit a compliance report confirming the payment had been made to the affected citizen.
The court stated that the bank’s conduct violated established principles of banking law and the Constitution, which prohibit arbitrary interference with a citizen’s financial rights and property access.
The ruling held that a person cannot be deprived of access to their property or have their financial freedom restricted except through a process clearly defined and authorised by law.
The court found that the bank’s negligence had directly interfered with the petitioner’s property rights, as no legal authority had formally directed that the account be blocked or frozen.
NCCIA acknowledged during proceedings that it had never instructed the bank to block the account, while the bank admitted it had done so on its own initiative as a precautionary measure.
The court directed the State Bank of Pakistan (SBP) to establish a clear regulatory mechanism ensuring that no account holder is unnecessarily affected by arbitrary or unsanctioned bank actions in future.
