SC calls for mandatory compensation to digital fraud victims in case of banks' due diligence
The Supreme Court of India has directed the RBI to establish a framework requiring banks to compensate victims of digital fraud if due diligence failures are proven. The court emphasized the need for preventive measures like transaction monitoring to combat rising cybercrime and digital arrest scams.
Why it matters
This ruling shifts the burden of financial accountability onto banks, potentially forcing significant changes in how financial institutions handle digital security and fraud prevention.
New Delhi Observing that banks must be made accountable to indemnify losses of victims of digital fraud, the Supreme Court on Thursday (October 29, 2026) said victims of offences like digital arrests should receive compensation of at least the amount lost if the fraud is found to have resulted from a failure of due diligence by the financial institution. Supreme Court terms cybercrime as digital dacoity, refuses consolidation of cases Supreme Court terms cybercrime as digital dacoity, refuses consolidation of cases Strongly condemning the organised cybercrime rackets targeting senior citizens through digital arrests, the CJI said those involved must face stringent action Supreme Court terms cybercrime as digital dacoity, refuses consolidation of cases storyline 1 A Bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V.
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