Supreme Court Issues Nationwide Directions to Curb Digital Arrest Scams, Orders RBI SOP and Stronger Cyber Fraud Recovery Mechanism

August 4, 2026 : The Supreme Court has issued a series of far-reaching directions to strengthen India’s response to cyber-enabled financial frauds, particularly the rapidly increasing menace of “digital arrest” scams. In a significant order passed in suo motu proceedings, the Court directed the Reserve Bank of India (RBI), Central Government, States, Union Territories and various enforcement agencies to implement coordinated measures aimed at preventing cyber fraud, improving investigation, ensuring speedy restoration of defrauded money and enhancing public awareness.

A Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana issued the directions after examining a status report submitted by the Indian Cyber Crime Coordination Centre (I4C), which highlighted the progress made in recovering money lost to cyber frauds. According to the report, ₹18.05 crore has already been restored to victims in 36,290 cases with the assistance of 57 banks and authorities across all States and Union Territories.

The Court observed that while significant institutional mechanisms have already been created, they require uniform implementation, continuous monitoring and faster execution across the country.

RBI Directed to Issue Standard Operating Procedure

One of the most significant directions issued by the Supreme Court is the requirement that the Reserve Bank of India formally adopt and circulate a comprehensive Standard Operating Procedure (SOP) within four weeks for all banks dealing with accounts suspected to be linked with cyber-enabled financial fraud.

The SOP will prescribe the procedure banks must follow whenever suspicious accounts are identified, including temporary debit restrictions to prevent further diversion of funds. Importantly, the SOP must also establish an effective grievance redressal system and a structured mechanism for restoration of money to victims. The Court further directed that adequate public awareness measures should accompany the SOP so that citizens understand how to seek relief.

High Courts Asked to Spread Awareness

Recognising the growing number of disputes relating to freezing of bank accounts, the Supreme Court directed the Registrars General of all High Courts to circulate information regarding the grievance redressal mechanism among courts and adjudicatory authorities handling such matters.

The Bench observed that individuals aggrieved by freezing orders should first be encouraged to approach the designated grievance redressal mechanism before pursuing other legal remedies.

States Ordered to Operationalise Cyber Crime Centres

The Supreme Court directed every State and Union Territory to notify and operationalise its State Cyber Crime Coordination Centre within four weeks. The States have also been instructed to implement the e-Zero FIR mechanism in consultation with I4C, while the Ministry of Home Affairs (MHA) will provide all necessary technical and administrative assistance.

The Court further directed authorities to ensure expeditious disposal of proceedings involving freezing of bank accounts connected with cyber-enabled financial fraud.

Public Awareness Campaigns to be Intensified

The Court entrusted the inter-departmental committee with issuing advisories to States, Union Territories, Ministries and Government departments for launching extensive public awareness campaigns against digital arrest scams and other cyber frauds.

These campaigns will educate citizens about common methods adopted by cyber criminals, available grievance redressal mechanisms, procedures for recovery of stolen funds and the Ministry of Home Affairs’ Standard Operating Procedure governing custody and restoration of defrauded money.

The committee has also been asked to coordinate closely with banks to strengthen preventive measures, improve recovery of siphoned funds, assist criminal investigations and ensure compliance with applicable statutory and regulatory requirements.

Shared Liability and Victim Compensation Under Consideration

In an important development aimed at protecting victims, the Supreme Court directed the inter-departmental committee to examine the feasibility of introducing a shared liability framework along with a dedicated victim compensation mechanism for individuals who lose money in digital arrest scams.

The Court also asked Legal Services Committees throughout the country to undertake awareness programmes regarding cybercrime prevention, cybersecurity practices and legal remedies available for recovery of defrauded money.

CBI Investigation Threshold May Be Reviewed

Taking note of the organised nature of cyber fraud syndicates, the Court directed the inter-departmental committee to examine whether the existing monetary threshold required for CBI investigation of cyber fraud cases should be reduced.

The committee has also been asked to consider whether multiple cases involving the same organised cybercrime network may be aggregated to determine whether the threshold for CBI intervention has been satisfied.

Audio and Video Call Restrictions Under Examination

The Supreme Court also directed the Ministry of Electronics and Information Technology (MeitY), the Department of Telecommunications (DoT) and I4C to examine the feasibility of introducing time-based restrictions on audio and video calls through telecom services.

The authorities have been instructed to submit a report before the Court assessing the practicality of such restrictions and suggesting possible alternatives.

The direction assumes significance because fraudsters operating digital arrest scams typically impersonate police officers, CBI officials, ED officers or other government authorities and keep victims on prolonged audio or video calls to create fear, psychological pressure and urgency before coercing them into transferring money.

CBI Action Against Digital Arrest Networks

The Supreme Court also took note of the extensive action already initiated by the Central Bureau of Investigation (CBI). The agency has registered multiple cases relating to digital arrest scams, traced victims through transactions involving 67 first-layer bank accounts and conducted searches at 93 locations across 16 States.

The matter will now be taken up for further consideration by the Supreme Court in September, when the authorities are expected to place compliance reports and further recommendations before the Court.