UPSC Prelims Practice Questions — Delhi HC refuses to interfere with bank show-cause notice to Anil Ambani's son
Q1. While refusing to interdict the show-cause notice issued by Union Bank of India to Jai Anmol Ambani in the Reliance Home Finance Ltd (RHFL) matter in January 2026, the Delhi High Court directed the noticee to file his response to the bank within how many days?
- A. 7 days
- B. 10 days
- C. 15 days
- D. 30 days
Q2. With reference to the Reserve Bank of India's Master Directions on Fraud Risk Management, 2024 vis-à-vis the earlier Master Directions on Frauds – Classification and Reporting (2016), consider the following statements:
1. The 2024 Master Directions supersede the 2016 framework for Commercial Banks (including Regional Rural Banks) and All India Financial Institutions.
2. Unlike the predecessor framework, the 2024 Master Directions expressly require issuance of a show-cause notice and grant of personal hearing to the borrower before classification of the account as 'fraud'.
3. The 2024 Master Directions are applicable only to Urban Cooperative Banks and not to Scheduled Commercial Banks.
Which of the statements given above is/are correct?
- The 2024 Master Directions supersede the 2016 framework for Commercial Banks (including Regional Rural Banks) and All India Financial Institutions.
- Unlike the predecessor framework, the 2024 Master Directions expressly require issuance of a show-cause notice and grant of personal hearing to the borrower before classification of the account as 'fraud'.
- The 2024 Master Directions are applicable only to Urban Cooperative Banks and not to Scheduled Commercial Banks.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q3. The requirement that a borrower must be issued a show-cause notice and granted a personal hearing before a bank classifies the account as 'fraud' — the very requirement around which the Delhi High Court's January 2026 order in the Jai Anmol Ambani case turns — was authoritatively laid down in:
- A. Section 35A of the Banking Regulation Act, 1949
- B. Section 13 of the SARFAESI Act, 2002
- C. The Supreme Court judgment dated 27 March 2023 in State Bank of India v. Rajesh Agarwal
- D. Section 11 of the SEBI Act, 1992
Q4. With reference to the institutional and regulatory backdrop of the Reliance Home Finance Ltd (RHFL) / Jai Anmol Ambani matter, consider the following:
1. Reliance Home Finance Ltd is a Non-Banking Financial Company – Housing Finance Company (NBFC-HFC).
2. The takeover of RHFL by Authum Investment & Infrastructure Ltd was implemented through an out-of-court resolution plan approved by lenders and upheld by the Supreme Court, not through corporate insolvency proceedings in the NCLT.
3. In its August 2024 order, SEBI imposed a penalty of ₹25 crore on Anil Ambani and barred him from accessing the securities market for five years.
4. The RBI's Master Directions on Fraud Risk Management, 2024 — under which Union Bank's show-cause notice is purportedly issued — were notified under the Securities and Exchange Board of India Act, 1992.
Which of the above is/are correctly identified?
- Reliance Home Finance Ltd is a Non-Banking Financial Company – Housing Finance Company (NBFC-HFC).
- The takeover of RHFL by Authum Investment & Infrastructure Ltd was implemented through an out-of-court resolution plan approved by lenders and upheld by the Supreme Court, not through corporate insolvency proceedings in the NCLT.
- In its August 2024 order, SEBI imposed a penalty of ₹25 crore on Anil Ambani and barred him from accessing the securities market for five years.
- The RBI's Master Directions on Fraud Risk Management, 2024 — under which Union Bank's show-cause notice is purportedly issued — were notified under the Securities and Exchange Board of India Act, 1992.
- A. 1, 2 and 3
- B. 1 and 4 only
- C. 2, 3 and 4
- D. 1, 3 and 4
Q5. Consider the following statements relating to the Jai Anmol Ambani / Reliance Home Finance Ltd (RHFL) proceedings:
1. The show-cause notice impugned before the Delhi High Court in January 2026 was issued by Union Bank of India.
2. The CBI's FIR underlying the bank-fraud allegations relates to an alleged loss of about ₹228 crore to Union Bank of India (erstwhile Andhra Bank).
3. The current statutory regulator of Housing Finance Companies (HFCs) in India is the National Housing Bank.
4. SEBI's August 2024 final order in the RHFL fund-diversion case imposed an aggregate monetary penalty of about ₹624 crore on the 27 noticees.
Which of the statements given above is/are NOT correct?
- The show-cause notice impugned before the Delhi High Court in January 2026 was issued by Union Bank of India.
- The CBI's FIR underlying the bank-fraud allegations relates to an alleged loss of about ₹228 crore to Union Bank of India (erstwhile Andhra Bank).
- The current statutory regulator of Housing Finance Companies (HFCs) in India is the National Housing Bank.
- SEBI's August 2024 final order in the RHFL fund-diversion case imposed an aggregate monetary penalty of about ₹624 crore on the 27 noticees.
- A. 1 only
- B. 3 only
- C. 2 and 4 only
- D. 3 and 4 only