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The story so far: To combat cyber-enabled fraud and to strengthen mechanisms for prevention, investigation, grievance redressal and speedy restoration of defrauded money to victims, the Supreme Court issued interim directions as a part of the suo motu proceedings concerning victims of digital arrest scams.
The Court had previously passed interim directions by orders dated December 1, 2025, December 16, 2025 and February 9, 2026 to secure a coordinated institutional response to the problem. These directions came on August 4, after the Court considered the Fourth Status Report dated August 3, 2026, submitted by the Indian Cyber Crime Coordination Centre (I4C), Ministry of Home Affairs.
The report that included deliberations by the inter departmental committee and steps taken by the Ministries, regulators, intermediaries etc was placed before the three-Judge Bench of Surya Kant, CJ. Joymalya Bagchi and V. Mohana, JJ by the Attorney General of India.
Have digital arrest scams declined?
The Supreme Court noted that the reported amounts defrauded through digital-arrest scams had declined substantially, calling the trend encouraging but stressing that continued monitoring remains indispensable. It noted that mechanisms for addressing cyber fraud had expanded, with the Grievance Redressal Mechanism now covering 1,23,590 branches of 69 banks and the Money Restoration Mechanism involving 57 banks and all States and Union Territories. Restoration had been completed in 36,290 cases, involving about ₹18.05 crore. However, the Court observed that these mechanisms required wider adoption, faster disposal and continued follow-up.
The Court also took note of the continuing scale of organised digital-arrest fraud. The CBI has registered ten such cases, with one investigation identifying 238 victims, 67 first-layer bank accounts and transactions of around ₹80 crore, leading to searches at 93 locations across 16 States. The Inter-Departmental Committee has asked the CBI to examine whether the existing ₹10-crore threshold for investigation should be lowered, including where multiple frauds are linked to the same organised network. The Court therefore made clear that the decline in reported fraud did not justify relaxing institutional vigilance.
What were the directions by the Supreme Court?
The Supreme Court directed the RBI to, within four weeks, adopt and circulate a standard operating procedure for banks on temporarily holding amounts or accounts linked to money-mule activity and cyber-enabled fraud. It also directed the implementation of safeguards such as delayed transaction or lagged-credit mechanisms for protecting customers in electronic banking transactions.
The Court directed all States, Union Territories and law-enforcement agencies to operationalise the Grievance Redressal and Money Restoration Modules under the MHA’s SOP. It asked the Registrars General of High Courts to make courts dealing with frozen bank accounts aware of these mechanisms, while clarifying that using the mechanism would not prevent victims from pursuing other legal remedies. States yet to do so were also given four weeks to notify and operationalise their State Cybercrime Coordination Centres and work towards adopting the e-Zero FIR mechanism.
The Inter-Departmental Committee was directed to coordinate public-awareness programmes on cybercrime and digital-arrest scams and consult banks and intermediaries on technological measures to prevent such fraud, recover defrauded money and aid investigations. State Legal Services Authorities were asked to formulate schemes to educate the public and assist victims in recovering their money. The Committee was also directed to examine a shared-liability and victim-compensation framework.
The Court further directed authorities, including the RBI Ombudsman, consumer fora, courts and law-enforcement agencies, to ensure that recovered money is disbursed to victims expeditiously. The CBI was asked to continue its investigations and examine whether the existing ₹10-crore threshold for taking up cases should be reduced, including by aggregating frauds linked to the same organised network.
The Ministry of Electronics and Information Technology, Department of Telecommunications and I4C were directed to examine the feasibility of a time-based “kill switch” for audio and video calls used in digital-arrest scams. The Department of Telecommunications was also asked to submit an Action Taken Report on errant telecom service providers and Point of Sale agents, including measures to tackle SIM-card abuse and KYC-related misuse. The Inter-Departmental Committee was directed to continue coordinating the implementation of these measures and file a fresh consolidated status report. The matter will next be considered on September 16, 2026.
Published – August 11, 2026 06:08 pm IST
