Supreme Court orders unified SOP to tackle ‘digital arrest’ scams

The Supreme Court on Monday (February 9) directed the Centre to frame a comprehensive standard operating procedure (SOP) to deal with the growing menace of “digital arrest” scams, and ordered CBI investigations, RBI-led banking safeguards, inter-agency coordination, and steps towards a national victim compensation framework.

The court observed that cyber fraudsters have siphoned off nearly Rs 54,000 crore so far — an amount larger than the annual budgets of several small states.

Centre given 4 weeks for draft MoU

Taking suo motu cognisance of the issue, a Bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and NV Anjaria asked the Ministry of Home Affairs (MHA) to draft the SOP in consultation with key stakeholders, including the Reserve Bank of India (RBI), banks, and the Department of Telecommunications (DoT). The court gave the Centre four weeks to come up with a draft memorandum of understanding to ensure coordinated action against such offences.

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Describing digital arrest scams as nothing short of “robbery or dacoity”, the court noted that fraudsters typically impersonate law enforcement or government officials and intimidate victims through audio or video calls. Victims are coerced into believing they or their relatives are under investigation and are forced to transfer large sums of money while being virtually “held hostage”.

Mechanism to compensate victims

The Bench took note of an RBI-drafted SOP that allows banks to place temporary debit holds to prevent cyber-enabled fraud. It directed the MHA to formally adopt the framework and issue nationwide implementation directions. The court also asked the RBI, DoT, and other agencies to hold a joint meeting to evolve a mechanism for compensating victims, stressing that a “pragmatic and liberal” approach was required.

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Expressing concern over banks’ role, the court said lenders must proactively flag suspicious transactions. The CJI observed that sudden high-value withdrawals by pensioners or small savers — far beyond their usual transaction patterns — should automatically trigger alerts through AI-driven tools.

“Why did your systems not alert the customer?” the Bench asked, warning banks against operating purely in “business mode”.

Strict enforcement, penalties sought

Justice Bagchi cautioned that banks risk becoming conduits for swift movement of stolen money, while Senior Advocate NS Nappinai, appearing as amicus curiae, argued that mere RBI circulars were insufficient without strict enforcement and penalties for non-compliance.

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The court also directed the Central Bureau of Investigation to identify digital arrest cases and sought sanctions from the Delhi and Gujarat governments to proceed with probes. The matter will be reviewed again in four weeks, with fresh status reports to be filed by all authorities.