Supreme Court cracks down on 'digital arrest' scams, directs RBI to frame SOP in 4 weeks

A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana passed the directions while hearing a suo motu case on cyber-enabled financial frauds and digital arrest scams.

During the hearing, the court considered submissions made by Attorney General R. Venkataramani, Solicitor General Tushar Mehta and amicus curiae, senior advocate N.S. Nappinai.

"The mechanism already put in place requires wide adoption, faster disposal and continued follow-up," the bench observed.

RBI directed to issue SOP for banks

The apex court directed the RBI to formally adopt and circulate a standard operating procedure within four weeks outlining the steps banks must follow to temporarily freeze transactions in accounts linked to cyber-enabled financial fraud.

The SOP must also include a grievance redressal mechanism for affected customers, a system to facilitate restoration of money to victims, and public awareness measures explaining both processes.

The court further directed the Registrars General of all High Courts to inform courts and adjudicating authorities dealing with frozen bank accounts about the grievance redressal mechanism, encouraging account holders to use it before approaching courts.

States asked to strengthen cybercrime infrastructure

The Supreme Court instructed all states and Union Territories to notify and operationalise State Cyber Crime Coordination Centres within four weeks.

It also directed them to implement the e-Zero FIR mechanism in consultation with the Indian Cyber Crime Coordination Centre (I4C) and with assistance from the Ministry of Home Affairs.

Authorities have also been asked to ensure the speedy disposal of cases involving bank accounts frozen in connection with cyber fraud investigations.

Centre told to examine victim compensation

Recognising the growing impact of digital arrest scams, the court directed the inter-departmental committee to examine the feasibility of introducing a shared liability and victim compensation framework.

The committee has also been asked to coordinate with banks on measures to prevent digital arrest frauds, facilitate recovery of stolen money and support investigations.

Additionally, it must issue advisories to states, Union Territories and government departments to launch extensive public awareness campaigns on cybercrime prevention and digital arrest scams.

Legal Services Committees across the country have also been directed to organise awareness programmes on cyber security, cybercrime prevention and available mechanisms for recovering defrauded funds.

CBI threshold, telecom safeguards under review

The court recorded that the inter-departmental committee has requested the Central Bureau of Investigation (CBI) to examine lowering the existing monetary threshold for taking over cyber fraud investigations.

It has also sought consideration of whether multiple fraud cases linked to the same organised network can be clubbed together to meet the threshold for CBI intervention.

Separately, the Ministry of Electronics and Information Technology (MeitY), the Department of Telecommunications (DoT) and the I4C have been directed to examine the feasibility of introducing time-based restrictions on telecom services for audio and video calls as a safeguard against digital arrest scams.

The agencies have been asked to submit a report before the Supreme Court detailing the feasibility, utility and possible alternatives to the proposal.