Crackdown on digital fraud: SC orders action, gives strict directions to RBI
The Supreme Court of India has ordered financial institutions and regulators to implement a coordinated strategy to combat 'digital arrest' scams. The court specifically directed the RBI to create a standard operating procedure for managing mule accounts used in cyber fraud.
Why it matters
As digital fraud becomes more sophisticated, this judicial intervention aims to protect citizens' assets and force institutional accountability in the banking sector.
The Supreme Court, on Tuesday, directed banks, financial intermediaries, regulators and law enforcement agencies to work together to curb the rising menace of "digital arrest" scams and improve the recovery of money lost to cyber fraud.Hearing a suo motu matter ‘In Re: Victims of Digital Arrest Related to Forged Documents', the court called for a coordinated institutional response, including faster grievance redressal, stronger mechanisms to restore victims' money and wider public awareness campaigns.The apex court directed the Reserve Bank of India (RBI) to formulate a Standard Operating Procedure (SOP) on mule accounts within four weeks, PTI cites.Mule accounts are bank accounts used by cybercriminals to receive, transfer or route money obtained through fraud.
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