New Delhi: Amid mounting concern over the limited recovery of money in online financial fraud cases, the Union Ministry of Home Affairs (MHA) has directed law enforcement agencies to strictly verify the authenticity of complaints before ordering the freezing of bank accounts. The move follows complaints that individuals and businesses are often caught in the cybercrime control framework due to mistaken identity, disputed transactions or inadequate verification, leading to serious financial disruption.
The directive forms part of revised Standard Operating Procedures (SOPs) issued for handling online fraud complaints reported through the National Cybercrime Reporting Portal (NCRP) and the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS). Officials said the changes are intended to balance swift action against cyber-enabled crimes with safeguards to prevent undue hardship to legitimate account holders.
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According to government data, between April 2021 and November 2025, authorities managed to block ₹7,647 crore from reaching fraudsters’ accounts. However, during the same period, only ₹167 crore was actually restored to victims, even as the total amount reported stolen through online financial frauds stood at a staggering ₹52,969 crore. While officials acknowledged that early intervention has helped prevent large sums from being credited to criminal networks, they admitted that actual recovery remains disproportionately low.
The revised SOPs instruct agencies to ensure that only genuine complaints are escalated within the financial fraud response ecosystem. Officials said unverified or erroneous complaints have frequently resulted in bank accounts being frozen without a clear link to fraud, disrupting routine financial activities of innocent customers.
Government sources said the MHA has taken note of instances where salary accounts, business current accounts and savings accounts were frozen for prolonged periods, affecting livelihoods and operations. In some cases, individuals faced delays in withdrawing salaries, making essential payments or running day-to-day businesses due to blanket account freezes triggered by disputed or incorrectly flagged transactions.
Under the new framework, enforcement agencies have been advised to apply measures such as placing funds on hold, suspending digital banking access or initiating seizure-related actions in a proportionate manner. Clear accountability has been emphasised at each stage of the process to prevent arbitrary or excessive action.
A senior official said that while speed is critical in cybercrime cases — where money can be transferred across multiple accounts within minutes — indiscriminate freezing of accounts based on incomplete verification undermines public trust and creates avoidable distress. “The objective is to stop fraud proceeds swiftly without paralysing legitimate financial activity,” the official said.
As part of efforts to strengthen real-time responses, banks will be encouraged to integrate their application programming interfaces (APIs) with the NCRP. Officials said this integration is expected to enable faster “put-on-hold” actions on suspected fraud proceeds and significantly improve coordination among police, banks, payment service providers, merchants and other financial intermediaries.
The government believes that tighter technological integration and faster communication across stakeholders will help ring-fence suspicious funds at an early stage. This, officials said, could reduce delays that currently allow money to be layered and laundered across multiple accounts, complicating recovery efforts.
Officials stressed that the revised SOPs are not intended to dilute enforcement but to make the system more precise and fair. By ensuring stricter scrutiny before accounts are frozen, authorities hope to focus resources on genuine fraud networks while minimising collateral damage to ordinary citizens.
The MHA has also reiterated the need for citizens to promptly report cyber frauds through the NCRP, noting that early reporting remains critical to improving recovery chances. At the same time, the ministry has underscored that verification must precede coercive financial action, signalling a shift towards a more calibrated and accountable cybercrime response mechanism.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
