New Delhi: The Supreme Court has issued a series of significant interim directions to strengthen institutional action against cyber fraud carried out in the name of digital arrest. The court has directed the Reserve Bank of India (RBI) to prepare and implement a standard operating procedure (SOP) for banks within four weeks. The framework will enable banks to temporarily hold suspicious accounts or funds linked to money-mule activity and cyber-enabled fraud. The court has also called for consideration of safeguards such as delayed transactions and lagged-credit mechanisms to protect customers during electronic banking transactions.
The three-judge Bench issued the directions while hearing a suo motu case concerning victims of digital arrest scams. The Bench comprised Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana. The directions were issued on August 4 after the court considered the fourth status report submitted by the Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs on August 3. The court had earlier issued interim directions on December 1, 2025, December 16, 2025 and February 9, 2026.
Fraud losses decline, but vigilance remains essential
The Supreme Court noted that the reported amount defrauded through digital arrest scams has declined substantially. While describing the trend as encouraging, the court stressed that institutional vigilance cannot be relaxed. According to the status report, the grievance redressal mechanism for cyber fraud now covers 1,23,590 branches of 69 banks. The money restoration mechanism involves 57 banks and all States and Union Territories.
Through these mechanisms, money has been restored in 36,290 cases, involving approximately ₹18.05 crore. However, the court observed that the mechanisms need wider adoption, faster disposal of complaints and continued follow-up to ensure that victims receive their money without unnecessary delay.
The court also expressed concern over the continuing threat posed by organised digital arrest networks. The CBI has registered 10 cases involving such fraud. In one investigation, authorities identified 238 victims, 67 first-layer bank accounts and transactions worth around ₹80 crore. Searches were conducted at 93 locations across 16 States. The Inter-Departmental Committee has also been asked to examine whether the existing ₹10-crore threshold for CBI investigation can be lowered in cases where multiple frauds are connected to the same organised network.
States and banks asked to strengthen response mechanisms
The court directed all States, Union Territories and law-enforcement agencies to operationalise the grievance redressal and money restoration modules under the Ministry of Home Affairs’ SOP. Registrars General of High Courts have been asked to ensure that courts dealing with frozen bank accounts are made aware of these mechanisms. The court clarified that using these mechanisms would not prevent victims from pursuing other legal remedies.
States that have not yet notified and operationalised their State Cybercrime Coordination Centres have been given four weeks to complete the process. States have also been directed to work towards adopting the e-Zero FIR mechanism to improve the speed and coordination of cybercrime investigations.
The court further emphasised the need for large-scale public awareness campaigns against cybercrime and digital arrest scams. The Inter-Departmental Committee has been directed to coordinate with banks and digital intermediaries to explore technological measures for preventing fraud, recovering defrauded money and assisting investigations. State Legal Services Authorities have also been asked to formulate schemes to educate the public and assist victims in recovering their money.
Renowned cybercrime expert and former IPS officer Prof. Triveni Singh said that early-stage monitoring within the banking system is crucial in tackling digital arrest fraud. Identifying money-mule accounts, immediately holding suspicious transactions and acting quickly after a complaint can prevent fraudulent funds from being transferred further. He said cybercriminals typically create fear by threatening victims with legal action and pressure them into making immediate payments, making public awareness and rapid financial intervention equally important.
Authorities to examine ‘kill switch’ for scam calls
The Supreme Court has directed the Ministry of Electronics and Information Technology, the Department of Telecommunications and I4C to examine the feasibility of a time-based “kill switch” for audio and video calls used in digital arrest scams. The Department of Telecommunications has also been asked to submit an action-taken report on errant telecom service providers and Point of Sale agents, including measures to tackle SIM-card misuse and KYC-related fraud.
The court directed the RBI Ombudsman, consumer forums, courts and law-enforcement agencies to ensure that recovered money is disbursed to victims expeditiously. The CBI has been asked to continue its investigations and examine whether the ₹10-crore threshold can be reduced for cases involving organised networks.
The Inter-Departmental Committee will continue coordinating the implementation of these measures and submit a fresh consolidated status report. The case will next be heard on September 16, 2026.
