When a 48-year-old resident of Gurugram picked up the phone last September, she could not have imagined it would cost her nearly everything she owned. Over the next five days, she was trapped in what is now recognized as one of India’s fastest-spreading frauds, a “digital arrest.”
The callers, posing as customs officials, claimed they had intercepted a drug-laden parcel she had allegedly sent to Beijing. Threatening prison and harm to her son, they forced her to remain under continuous surveillance on Skype while directing her to transfer her savings. By the time the ordeal ended, 5.85 Crores Rupees had vanished.
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Her story underscores not just the human toll of such crimes but also the systemic weaknesses in India’s banking safeguards and regulatory oversight.
A Scam That Exploits Fear
Cases like Anjali’s are multiplying across the country. Government data shows reported “digital arrests” nearly tripled from 2022 to 2024, with victims losing millions. Authorities have issued nationwide alerts, blocked thousands of suspicious accounts, and launched awareness drives on television, radio, and social media. Even the prime minister has publicly warned citizens against these schemes.
Yet the fraud continues to spread. Police investigations reveal networks of mule accounts, often opened in the names of unsuspecting labourers, widows, or the poor, used to launder funds. Cooperative banks with weak compliance systems have emerged as frequent nodes in these operations.
Banks Under Scrutiny
What haunts Anjali most is how her own banks handled the transactions. She recalls walking into her HDFC Bank branch under pressure from scammers, transferring Rs. 2.8 Crores in one day and another Rs. 3 Crores the next. Despite the sums being hundreds of times larger than her usual activity, no red flag was raised.
The money swiftly moved through accounts at ICICI Bank before being dispersed into a web of cooperative bank accounts, many with fictitious addresses. Police later arrested a former cooperative bank director accused of facilitating mule accounts, but most of the funds remain untraceable.
HDFC and ICICI deny wrongdoing, insisting procedures were followed and that her transfers were authorized. India’s banking ombudsman has rejected her complaints, citing rules that place liability on customers if fraud is deemed their fault.
For Anjali, the losses remain staggering, compounded by tax demands on her liquidated investments. She has recovered barely a fraction of her savings and faces a long battle in consumer court.