Seeking to close critical gaps in India’s fight against cyber-enabled financial fraud, the Supreme Court has ordered a nationwide rollout of the Reserve Bank of India’s new Standard Operating Procedure, giving banks sharper powers to act swiftly against “digital arrest” scams.
Court Steps In as Digital Arrest Scams Surge
In a decisive intervention, the Supreme Court of India has directed the Ministry of Home Affairs to formally adopt and implement, across all states and Union Territories, the Standard Operating Procedure (SOP) issued by the Reserve Bank of India on January 2, 2026.
The court ordered that the necessary rules and administrative framework for enforcement be notified within two weeks, underscoring what it described as the urgency of coordinated national action against rapidly evolving cyber fraud networks. The directive comes against the backdrop of a sharp rise in so-called “digital arrest” cases, in which victims are threatened with fabricated criminal charges and coerced into transferring money.
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What the RBI SOP Seeks to Fix
At the heart of the court’s order is the RBI’s SOP, which lays out a structured response mechanism for cyber-enabled financial frauds. The framework is designed to synchronise the actions of banks, law-enforcement agencies and cybercrime cells, addressing long-standing delays and jurisdictional confusion that often allow fraudsters to move funds beyond recovery.
A central feature of the SOP is the authority granted to banks to impose temporary debit freezes on accounts suspected of being involved in cyber fraud. These holds are meant to be preventive rather than punitive, buying crucial time for investigators once an alert is raised. The court noted that in many cases, even a delay of a few minutes enables fraudsters to layer transactions across multiple accounts and jurisdictions.
Banks Given a Sharper Preventive Role
The Supreme Court observed that traditional investigative responses have struggled to keep pace with the speed of digital fraud. By empowering banks to act immediately—without waiting for lengthy inter-agency clearances—the SOP seeks to stop the outflow of funds at the earliest possible stage.
The court emphasised that such temporary debit restrictions are not intended to replace criminal investigation, but to complement it. By freezing suspect accounts early, banks can help preserve transaction trails and improve the chances of restitution to victims, particularly in high-pressure scams involving impersonation and threats of arrest.
Toward Uniform, Nationwide Enforcement
Another concern highlighted by the court was the uneven handling of cyber fraud cases across states. Investigators often face difficulties in locating victims, identifying mule accounts and coordinating freezes when transactions span multiple jurisdictions. The absence of a uniform protocol, the court noted, has repeatedly weakened enforcement.
By mandating nationwide implementation of the RBI SOP, the court sought to ensure that banks and police authorities follow the same timelines, communication channels and accountability standards, regardless of where a complaint originates. Such standardisation, it said, is essential in a digital ecosystem where fraud networks operate seamlessly across state borders.
A Time-Bound Mandate for the Centre
The court’s two-week deadline places the onus squarely on the Centre to translate the RBI’s framework into enforceable rules. With complaints of cyber-enabled fraud continuing to rise, the ruling signals a shift toward more proactive, institution-led prevention rather than reactive investigation.
Legal and banking experts say the order could mark a turning point in how India tackles digital financial crime—by aligning regulatory authority, law enforcement and banking systems into a single, time-sensitive response chain. Whether the SOP delivers on that promise will depend on how swiftly and uniformly it is implemented on the ground.
