The Supreme Court of India has taken a significant step to combat the rising menace of digital arrest scams, issuing comprehensive directives aimed at curbing such fraudulent activities across the nation. The Bench, led by Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana, delivered these orders in a suo motu case originally taken up last year.
RBI to Frame SOP on Mule Accounts
One of the key directives includes a mandate for the Reserve Bank of India (RBI) to formulate a standard operating procedure (SOP) within four weeks. The SOP is to address the issue of mule accounts—bank accounts that criminals exploit for laundering or transferring illicit funds, sometimes unbeknownst to the account holders. This SOP is also to be circulated to the Registrar General of every High Court for further implementation.
Progress Report and Court Observations
The Supreme Court’s directives were informed by a detailed status report presented by the Indian Cyber Crime Coordination Centre (I4C) under the Union Ministry of Home Affairs. This report documented the progress made by various ministries, regulatory bodies, law enforcement agencies, and financial institutions in response to the Court’s previous interim orders from December 2025 and February 2026.
The report highlighted a significant decline in complaints related to digital arrest scams reported on the National Cyber Crime Reporting Portal (NCRP), dropping from 123,672 in 2024 to 16,377 by June 2026. The financial losses from these scams have also decreased notably. While the Court acknowledged these improvements, it emphasized the need for ongoing vigilance and monitoring.
CBI’s Role and Recommendations
The Central Bureau of Investigation (CBI) has been actively involved, registering ten cases and related matters concerning digital arrest scams. In one notable investigation, the CBI identified 238 victims and uncovered transactions worth approximately ₹80 crore, conducting operations across 93 locations in 16 states. The Inter-Departmental Committee suggested that the CBI consider lowering the ₹10-crore threshold for taking over such cases and aggregate cases involving the same organized network to meet this threshold.
Further Directions and Initiatives
The Supreme Court issued several other directives for the broader and quicker implementation of measures against digital scams:
- States, Union Territories, and law enforcement agencies are to swiftly operationalize the Grievance Redressal and Money Restoration Modules under the MHA’s SOP for the National Cyber Crime Reporting Portal.
- High Courts’ Registrar Generals were informed about grievance mechanisms to expedite the resolution of bank account freezing in cyber fraud cases.
- States yet to establish State Cyber Crime Coordination Centres must do so within four weeks, adopting the e-Zero FIR mechanism in consultation with I4C.
- The Court urged authorities to ensure the prompt resolution of bank account freezing cases resulting from cyber-enabled financial frauds.
- The Inter-Departmental Committee should consult with banks and intermediaries on technological measures to prevent scams, assist in recovering defrauded amounts, and ensure compliance with legal obligations.
- Public awareness initiatives on digital scam prevention and cybercrime awareness were recommended for immediate implementation by State Legal Services Authorities.
- The committee is to explore a shared liability and victim compensation framework and consider adjusting the CBI investigation threshold for monetary losses in digital scams.
- The Ministry of Electronics and Information Technology (MeitY) and the Department of Telecommunications (DoT) are to examine proposals for time-based restrictions on telecom services for calls.
The Court also noted the execution of a memorandum of understanding (MoU) for data sharing between the RBI Innovation Hub and I4C, and the existence of cybercrime grievance redressal and money restoration portals covering numerous banks and states. The next status report, due on September 16, will include detailed data from states and banks regarding registered grievances and restored amounts.
