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Informist, Monday, Feb. 9, 2026

 

NEW DELHI – The Supreme Court Monday asked the Department of Telecommunications and the Reserve Bank of India to hold a joint meeting and come up with a framework for compensation to be paid to victims of digital arrest frauds. The court termed the siphoning of over INR 540 billion in such cases as absolute "robbery" or "dacoity". A bench headed by Chief Justice Surya Kant also ordered the central government to prepare a draft memorandum of understanding within four weeks to strengthen coordination among different departments and agencies and effectively tackle digital frauds.

 

The court took note of the fact that the RBI has drafted a standard operating procedure which prescribes action wherein temporary debit holds can be placed by banks to prevent cyber-enabled frauds and asked the Centre to formally adopt and implement the procedure across the country. "We direct the Centre to formally adopt, implement RBI's SoP (standard operating procedure) across India for inter-agency coordination in dealing with digital frauds," the court said.

 

The court also asked the Central Bureau of Investigation to identify digital arrest fraud cases in the country and urged the Gujarat and Delhi state governments to accord sanction for probes in identified matters. It directed the RBI to examine the transactions in digital fraud cases and take appropriate decisions.

 

The court Monday said banks have the responsibility to develop a mechanism to alert customers in case of suspicious or large-scale transactions in their accounts. When a retired individual, who only withdraws an amount ranging from INR 10,000 to INR 20,000, suddenly undertakes transactions in millions, the banks should issue an alert, it said.

 

"If there is a business entity with crores of transactions, it may not raise suspicions. But there is a pensioner, who withdraws INR 15,000-20,000, suddenly from his account 50 lakh (INR 5 million), 70 lakh (INR 7 million), 1 crore (INR 10 million) is being withdrawn, why your AI (artificial intelligence)-operated tools in the bank did not deem it fit to alarm him, that this transaction is suspicious?" the court said. Attorney General of India R. Venkataramani, appearing for the RBI, said the central bank will address the concern.

 

The problem is that banks are more into business mode and in doing that they are becoming platforms through which there is swift and seamless transmission of stolen proceeds of crime, the bench, also comprising Justice Joymalya Bagchi and Justice N.V. Anjaria, said. "In the over-anxiety of making profits, banks must realise they are trustees of public money," the court said. "People have deposited because they trust the banks. These banks are becoming a huge liability to the public. The courts are becoming their recovery agents. They grant loans recklessly and then you have NCLT (National Company Law Tribunal) and NCLAT (National Company Law Appellate Tribunal), only to recover money for them!"

 

In December, the Supreme Court had ordered the CBI to probe the digital arrest scams taking place across the country, saying the premier investigating agency's immediate attention is required. The court had taken suo motu cognisance of the rising number of incidents of scamsters using "digital arrest" to extort money from citizens after a complaint that a forged Supreme Court order was being used to con people.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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