The Gujarat High Court has taken up a startling case where a couple from Rajkot has accused Indian Bank of losing their pledged gold ornaments valued at a staggering Rs 1.15 crore. The bank allegedly continued to charge interest on the loans for months after the gold went missing, without informing the customers.
What Happened? The Sequence of Events
Sangeeta Shah and Shyam Shah had availed two MSME jewellery loans in 2023 from the Rajkot branch of Indian Bank. They pledged 1,004.1 grams of 22-carat jewellery, which included gold ornaments and gemstones. As per standard practice, the loans were renewed annually after the bank appraised the value of the pledged items.
The trouble began when the couple sought a renewal of their loans on October 28, 2025. Shockingly, the very next day, the bank informed them that the renewal was impossible because the pledged jewellery was missing. The bank then asked the petitioners to submit a reimbursement claim, quoting a reference rate of Rs 10,813 per gram for 24-carat gold.
Allegations of Negligence and Coercion
Further revelations from the bank were more alarming. It disclosed that the ornaments had been missing since March 2025 and that it had lodged a police complaint in July. However, no First Information Report (FIR) had been registered at the time of the court filing.
Advocate Nimit Shukla, representing the petitioners, argued that the bank committed a serious breach of its duty of care. He stated that the bank suppressed this critical information for several months while continuing to demand and accept interest payments from the couple.
Instead of offering prompt compensation, the couple alleged that the bank resorted to coercive tactics. The bank threatened to classify their loan accounts as Non-Performing Assets (NPAs), imposed penal charges, and their credit scores began to suffer. The petitioners made a formal representation on November 5, 2025, highlighting the bank's negligence and seeking reimbursement for the lost gold, making charges, and the value of the gemstones, but to no avail.
Legal Battle and Court's Intervention
Frustrated by the bank's response, the Shahs approached the Gujarat High Court. Their petition contended that the bank's actions, including the deliberate suppression of information and failure to compensate, were in absolute disregard of the guidelines laid down by the Reserve Bank of India (RBI).
The couple has sought directions to the Centre and the RBI to take appropriate action against Indian Bank. They have also requested the court to direct the bank to compensate them as per law or, alternatively, to constitute an independent vigilance committee to investigate the matter.
After a preliminary hearing, Justice Aniruddha Mayee issued notices to the Centre, the RBI, and Indian Bank. The court has sought their replies by January 27, when the matter will be heard next. This case puts a spotlight on the security of pledged assets and the accountability of financial institutions towards their customers.
