SC takes tough stand on digital arrest scams
In a bid to crack down on the rising menace of “digital arrests“, the Ministry of Home Affairs (MHA) has informed the Supreme Court that it has constituted a high-level inter-departmental committee (IDC) to eliminate systemic gaps and ensure real-time protection for cybercrime victims. The Supreme Court on Monday described the siphoning of huge amounts of money by digital frauds as absolute “robbery or dacoity” and asked the Centre to draft a standard operating procedure in consultation with stakeholders like the RBI, banks, and the Department of Telecommunications to deal with such cases.
The apex court also expressed grave concern over the “menace” of digital arrest scams and said banks must play a proactive role in preventing cyber-enabled fraud. A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and N V Anjaria observed that banks have a fiduciary responsibility to alert customers when unusual, large-scale transactions occur in accounts typically used for sending or receiving small amounts. CBI also informed the court of taking over the cases, ranging from Rs.1.64 lakh crores.
The Supreme Court also asked the Reserve Bank of India (RBI), the Department of Telecommunications (DoT), and others to jointly hold a meeting to come up with a framework for providing compensation in digital arrest cases. Senior advocate N S Nappinai, appearing as an amicus curiae, said banks should be asked to issue alerts to customers about suspicious transactions, and AI tools can be used for this purpose. “If there is a business entity with crores of transactions, it may not raise suspicions. But there is a pensioner, who (generally) withdraws Rs.15,000-Rs.20,000; suddenly from his account, Rs.50 lakh, Rs.70 lakh, Rs.1 crore is being withdrawn, then why did your AI-operated tools in the bank not deem it fit to alarm him that this transaction is suspicious?” the bench posed.
The Attorney General R Venkataramani said that the RBI will address the issue.
“The problem is banks are more into business mode, and naturally so. And in doing that, what they are becoming, either innocently or connivingly, platforms through which there is a swift and seamless transmission of stolen proceeds of crime,” the Supreme Court bench said. Justice Bagchi said the MHA’s report itself flagged that over Rs 52,000 crores have been misappropriated between April 2021 and November 2025 through cyber fraud. “These banks are becoming a liability. Banks should know that they are a trustee of the money, and they should not get overexcited with it. That trust should not be broken. The problem is these banks give loans to these fraudsters and then NCLT, NCLAT (comes into the picture when the fraudulent companies become embroiled in insolvency disputes), etc.,” the CJI said.
A bench headed by Chief Justice Surya Kant on December 16, 2025, ordered inter-departmental ministerial consultations under the guidance of the Attorney General on the issue and apprised it of the outcome.
The status report filed by the MHA detailed a multi-agency offensive involving the CBI, RBI, Telecom Department, and top IT Ministries to dismantle transnational syndicates using forged documents and “digital arrest” tactics to siphon funds from innocent citizens. Acting on the directions of the bench, the report said the CBI has officially taken over the investigation into a high-profile fraud case of Delhi, where the victim, a 76-year-old widowed pensioner, was allegedly duped of Rs.1.64 crore through a “digital arrest” scam where she was threatened by impersonators using fake documents.
The CBI informed the court that these scams are often perpetrated by “organised and transnational cybercrime syndicates” and that the agency is now utilising INTERPOL channels to dismantle international modules. The MHA has established an IDC under the chairmanship of the special secretary (internal security). The panel includes joint secretary-level officers from the Ministry of Electronics and Information Technology (MeitY), Department of Telecommunications (DoT), Reserve Bank of India (RBI), Ministry of External Affairs (MEA), and Indian Cyber Crime Coordination Centre.
The DoT reported significant progress in curbing “spoofed” calls (calls from foreign locations appearing as Indian numbers), it said.
Through the newly introduced Central International Out Roamer (CIOR) mechanism, the government successfully blocked approximately 1.35 crore spoofed calls in October 2024 alone, bringing the current volume down to roughly 1.5 lakh calls. Furthermore, it said the DoT is finalising rules under the Telecommunications Act, 2023, to address negligent issuance of SIM cards by point-of-sale (PoS) agents and enforcement of the 9-SIM-per-person cap and the regulation of ‘SIM Boxes‘ used by fraudsters.
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