NEW DELHI: Banking regulator RBI and the country’s largest PSU bank SBI Monday told Supreme Court it was not possible to give personal hearings to account holders before declaring an account fraud in view of the massive number of banking frauds.The country witnessed 60,000 cases of bank fraud in the last two financial years involving Rs 48,244 crore, the financial institutions said.Responding to query of a bench of Justices J B Pardiwala and K V Viswanathan on why personal hearings cannot be given before declaring an account fraud which is part of natural justice, solicitor general Tushar Mehta, appearing for SBI, said the number of bank frauds had been alarming in recent years and any personal or oral hearing would derail the entire process of declaring an account fraud.He said the number of bank frauds was 23,953 in FY 2024-25 and 36,060 in FY 2023-24. The amount involved was Rs 36,014 crore in 2024-25, which was a 194% jump from Rs 12,230 crore in the previous year. Mehta said no bank gives personal hearings as it may defeat the very purpose of declaring the account to be a fraud. He argued that banks may have to encounter situations by which it would not be possible to afford oral hearing or personal hearing to the parties concerned.RBI also told the bench it had not issued any circular for making personal hearings mandatory in declaring an account fraud. The lawyer appearing for RBI said operationally it would not be feasible to do so, and if it is made mandatory, then bankers would have to spend more time on granting personal hearings than doing banking operations. He said RBI left it to the wisdom of banks to take a call, and everything cannot be micromanaged by the regulator. The bench, however, said there may be situations where personal hearing should be given for which there are no guidelines.In 2023, SC held that the principles of natural justice demand that borrowers must be served a notice and given an opportunity to explain the conclusions of the forensic audit report before their account is classified as fraud under the Master Directions on Frauds. In addition, the decision classifying the borrower’s account as fraudulent must be made by a reasoned order. After the verdict, the controversy arose whether personal hearings needed to be given or written response filed by account holder was enough before declaring an fraudulent account.