Karnataka High Court orders fresh look at Rs 11.92 crore lien on Fino Payments Bank funds

The Karnataka High Court on 4 November 2026 set aside a Bengaluru special court order that had refused to lift a police lien on Rs 11.92 crore of Fino Payments Bank's money. The High Court sent the bank's plea back to the special court and asked it to decide again within eight weeks, keeping in mind the Reserve Bank of India's operating guidelines for payments banks.

What Happened

The lien, a hold that stops the account holder from using the money, was marked on Rs 11.92 crore in the bank's account with Punjab National Bank's Nerul branch in Mumbai, according to the High Court's order. Police marked it while investigating a 2023 case registered at Bengaluru's Wilson Garden police station over the alleged misappropriation of more than Rs 47 crore of D. Devaraj Urs Truck Terminal Limited, a government-owned company, as the special court's order describes the prosecution's case.

The High Court noted that Fino Payments Bank is not named as an accused and that no specific act is attributed to it. The bank argued that the money is its own capital and that some of its merchants had misused its cash management platform. The special public prosecutor argued that funds in the case were routed through the bank and that the lien should stay until the investigation ends.

On 4 March 2026 the special court rejected the bank's application, saying the question could not be decided while a High Court stay on part of the investigation remained. The High Court allowed the bank's petition in part, quashed that order and remitted the application for fresh consideration.

These are allegations, not findings of guilt; the accused are presumed innocent until proven guilty in court, and due process continues.

What It Means

The ruling does not release the money. The Rs 11.92 crore stays under lien until the special court decides the bank's application again, and that court must now weigh the RBI's operating guidelines for payments banks when it does.

For shareholders of the listed payments bank, the order means a decision on the frozen funds is due within eight weeks of the special court receiving the High Court's order. Bank customers with a complaint about a regulated bank can approach the RBI at https://cms.rbi.org.in.

Source: High Court judgment