New Delhi:- On Thursday, the Supreme Court expressed concern over the rising number of ‘digital arrest’ cases. The court questioned how even educated people continue to fall victim to these frauds despite awareness campaigns and frequent media reports.
Chief Justice Surya Kant remarked, “If cyber fraud occurs due to negligence on the part of a bank, the bank should compensate the victim, and action should be taken against it once responsibility is established. This is currently a proposal, not a final order.”
In 2026, more than 22,000 cases of ‘digital arrest’ were reported in the country, with cybercriminals defrauding victims of more than Rs 800 crore. Meanwhile, 58,239 such cases were reported in 2025, resulting in losses of approximately Rs 1,211 crore.
During the hearing, the court said that merely preparing a report after an incident is not enough; concrete preventive measures must be taken in advance to stop such fraud. The court asked why banks cannot temporarily block transactions—or at least verify them—when unusual activity is detected in an account. Suspicious transactions should be investigated, and the local police should be informed.
The RBI’s proposed regulations should include provisions to ensure compensation for victims, particularly in cases where financial institutions have failed to exercise the required caution. The court also sought a list of all financial institutions authorised by the RBI.
The Supreme Court has directed the RBI to review its proposed KYC amendment guidelines for 2026 and submit a list of all authorised financial institutions.
