SC Orders RBI To Frame SOP On Cyber Fraud-Linked Bank Accounts

The Supreme Court on Tuesday directed the Reserve Bank of India (RBI) to formulate and circulate a standard operating procedure (SOP) for handling bank accounts linked to cyber fraud, including mule accounts, as part of a series of measures to strengthen the country's response to digital financial crimes.

According to India Today, the directions were issued by a Bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohan while hearing the suo motu case, In Re: Victims of Digital Arrest Related to Forged Documents.

SOP Distribution

The RBI has been asked to share the SOP with the Registrars General of all High Courts so that the guidelines can be disseminated across the judiciary.

The court also directed all States, Union Territories and law enforcement agencies to swiftly operationalise grievance redressal and money restoration modules for victims of cyber-enabled financial fraud.

Authorities have further been instructed to create greater public awareness of these mechanisms to ensure victims know how and where to seek assistance. Registrars General of the High Courts have been asked to inform courts about the available grievance redressal and money restoration systems.

Seeking greater transparency in the handling of cyber fraud complaints, the Bench ordered the submission of a report detailing State-wise and bank-wise figures on grievances registered and resolved under the cyber fraud redressal mechanism.

Inter-Departmental Committee

The Supreme Court also called for the expeditious disposal of cases involving the freezing of bank accounts during cyber fraud investigations, underscoring the need for quicker action in matters involving financial losses.

In a further direction, the Bench asked the Centre's Inter-Departmental Committee to hold consultations with banks and financial intermediaries on measures to curb "digital arrest" scams and explore ways to improve the recovery of money lost by victims.

The directions come a week after the apex court suggested that the Centre consider defining "digital arrest" as a distinct criminal offence carrying stringent punishment.

The latest order seeks to strengthen coordination among regulators, banks, financial intermediaries, law enforcement agencies, State authorities and the judiciary in tackling digital fraud and facilitating the recovery of defrauded funds.