Despite stepped-up efforts to combat cyber fraud, the recovery of stolen money remains alarmingly low, exposing a major gap between blocking fraudulent transactions and returning funds to victims. According to a government document, authorities have managed to prevent ₹7,647 crore from reaching cybercriminals between April 2021 and November 2025. However, of the ₹52,969 crore reported stolen during this period, only ₹167 crore — around 2.18 percent — has been restored to victims.
The figures come as the Centre has rolled out a tighter standard operating procedure (SOP) for law enforcement agencies to balance swift action against cyber fraud with safeguards to prevent unnecessary hardship for citizens whose bank accounts are frozen without adequate verification.
Officials acknowledge that while the system has improved at intercepting suspicious transactions, procedural hurdles, legal delays, and fragmented coordination have sharply limited the actual recovery of money. The government now aims to close this gap by refining how complaints are escalated and how financial interventions are triggered.
Under the revised framework, agencies have been instructed to ensure that only genuine and verified complaints are escalated for financial action. The move follows growing concern over cases where bank accounts of ordinary citizens and businesses were frozen due to mistaken identity, disputed transactions, or incomplete verification — often without a clear link to a confirmed fraud chain.
Such freezes can disrupt daily life, affecting salary withdrawals, business operations, rent payments, and essential expenses. The SOP therefore stresses that measures such as “put-on-hold” instructions, suspension of digital banking facilities, and account seizures must be proportionate, evidence-based, and accountable, rather than automatic or blanket actions.
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Focus on Genuine Cases, Reduced Collateral Damage
Officials said the revised guidelines are designed to prevent innocent account holders from being caught in the dragnet of cybercrime enforcement. Investigators have been asked to apply tighter scrutiny before pushing complaints into the financial fraud response ecosystem, ensuring that action is backed by a clear transaction trail and verifiable links to criminal activity.
The Centre’s approach reflects an attempt to strike a balance between urgency and fairness, recognising that indiscriminate freezes can erode trust in the system even as cybercrime continues to expand rapidly across platforms.
Faster Response Through Bank–Portal Integration
To improve real-time response, banks are being encouraged to integrate their systems via APIs with the National Cybercrime Reporting Portal (NCRP). This integration is expected to enable faster “put-on-hold” actions on suspected proceeds of fraud and smoother coordination between police, banks, payment operators, and other financial intermediaries.
Officials noted that delays of even a few minutes can allow fraudsters to move money across multiple accounts, often routing it through layers of wallets and intermediaries to complicate tracing and recovery. By tightening communication channels and automating alerts, authorities hope to ring-fence suspicious funds at an early stage.
Grievance Redress and Time-Bound Relief
The SOP also lays out a structured grievance redress mechanism for account holders who believe their funds were wrongly held or their accounts frozen without valid cause. Such individuals can approach their banks to raise complaints, after which investigating officers are expected to verify claims — preferably through video conferencing — to avoid repeated physical visits and prolonged delays.
If grievances are not resolved within prescribed timelines, escalation pathways up to district- and state-level grievance officers have been defined to ensure accountability and faster relief.
Bridging the Gap Between Blocking and Recovery
While the government’s systems have shown measurable success in preventing funds from reaching cybercriminals, officials concede that recovery remains the weakest link. The updated SOP signals a policy push to streamline legal and operational steps governing interim custody of funds and their eventual release to victims.
The emphasis is on reducing avoidable litigation and procedural bottlenecks, particularly in cases involving a single victim and clearly traceable funds, while still ensuring due process for suspected beneficiaries.
With online fraud continuing to grow across UPI, internet banking, e-commerce platforms, digital wallets, and impersonation scams, the Centre believes its tighter escalation rules and API-led coordination can serve a dual purpose — hitting cybercriminals faster while shielding innocent citizens from disruption caused by mistaken freezes.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
