Mandate damages for savings lost in 'digital arrest': SC to RBI
The Supreme Court of India has directed the Reserve Bank of India to mandate that financial institutions indemnify customers who lose money to 'digital arrest' scams. The court suspects bank employee complicity and has requested stricter monitoring of high-value transactions.
Why it matters
This intervention addresses the growing crisis of cyber fraud in India and seeks to shift the burden of security and liability onto financial institutions.
NEW DELHI: Convinced of bank personnel's complicity in cases of cyber fraudsters duping people by staging 'digital arrest', SC told Reserve Bank of India that its proposed Nov 30 standard operating procedure (SOP) must mandate every financial institution to indemnify those who lose money kept with banks to digital conmen."How do fraudsters and cybercriminals know how much money is kept in which account? Without bank employees sharing this information with fraudsters, there is no possibility of them targeting individual account holders," said a bench of CJI Surya Kant and Justices Joymalya Bagchi and V Mohana.
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