Digital arrest scams have resulted in losses exceeding ₹3,000 crore across India, prompting the Supreme Court to question the banking system’s role in preventing such frauds and propose compensation for victims where banks fail to exercise due diligence.
During a hearing on October 29, Chief Justice of India Surya Kant, heading a three-judge Bench, criticised the Reserve Bank of India (RBI) for its response to the growing cybercrime menace. The Bench, which also included Justices Joymalya Bagchi and V Mohana, questioned how educated citizens continued to fall for threats of arrest over phone and video calls.
The court also raised concerns over suspiciously large transactions from individual accounts, particularly those belonging to senior citizens, without adequate scrutiny. It suggested that banks could be held financially accountable if negligence in monitoring transactions contributed to victims losing money.
Digital arrest fraud involves criminals impersonating police officers, CBI or Enforcement Directorate officials and judges. Victims are falsely accused of involvement in crimes such as money laundering or drug trafficking and threatened with arrest. Fraudsters use forged documents and prolonged video calls to intimidate them into transferring money for supposed verification.
According to Indian Cybercrime Coordination Centre (I4C) figures submitted to the court, complaints rose from 39,925 in 2022 to 1,23,672 in 2024, with losses reaching ₹1,935 crore. In 2025, 58,239 complaints involving ₹1,211 crore were recorded. Between January and August 2026, another 21,928 complaints reported losses exceeding ₹647 crore.
Meanwhile, the RBI is considering revised KYC guidelines, temporary debit holds on suspicious transactions and a proposed emergency ‘kill switch’ to immediately stop banking operations when fraud is suspected.
