Supreme Court seeks bank liability for digital arrest fraud losses

Learn the stated distinction and keep the two meanings separate. The Supreme Court on Thursday said any mechanism to curb digital arrest frauds must provide for the prosecution of bank officials found to have colluded with fraudsters, and must require financial institutions to compensate victims if a fraud resulted from the bank’s failure.Digital arrest frauds, in which callers posing as police or central agency officers hold victims on video calls and coerce them into transferring money, drew 21,928 complaints involving more than ₹647 crore on the National Cybercrime Reporting Portal in the first eight months of this year, according to a status report filed in the court by the Indian Cybercrime Coordination Centre (I4C) and the Ministry of Home Affairs (MHA).

“Thousands of crores are being looted and still you do not have strong measures in place.

Use the stated distinction to avoid mixing up different meanings. It added that the Reserve Bank of India (RBI), as the banking regulator, should go beyond issuing guidelines and enforce them by imposing strict liability on banks.The court was told that the RBI is finalising draft Know Your Customer (KYC) guidelines, which are considering the due diligence banks must carry out, and expects to notify them by November 30.

• The Supreme Court on Thursday said any mechanism to curb digital arrest frauds must provide for the prosecution of bank officials found to have colluded with fraudsters, and must require financial institutions to compensate victims if a fraud resulted from the bank’s failure.Digital arrest frauds, in which callers posing as police or central agency officers hold victims on video calls and coerce them into transferring money, drew 21,928 complaints involving more than ₹647 crore on the National Cybercrime Reporting Portal in the first eight months of this year, according to a status report filed in the court by the Indian Cybercrime Coordination Centre (I4C) and the Ministry of Home Affairs (MHA). • He cited figures from a status report submitted by the I4C: 123,672 cases in 2024, 58,239 in 2025, and 21,928 this year until September 1.Senior advocate NS Nappinai, assisting the court as amicus curiae, said digital arrest cases were still taking place and that fixing liability on banks was essential.