Supreme Court Orders RBI SOP on Cyber Fraud, Directs Pilot Linking Fuel Sales to Motor Insurance

August 5, 2026 : The Supreme Court has issued significant directions to strengthen India’s response to cyber fraud and improve compliance with motor vehicle insurance laws. In two important orders, the Court directed the Reserve Bank of India (RBI) to prepare a Standard Operating Procedure (SOP) for handling mule accounts and cyber fraud-related bank accounts, while also asking the Central Government to launch a pilot project linking fuel sales with valid third-party motor insurance.

A Bench of the Supreme Court directed the RBI to frame and circulate a comprehensive SOP for banks to deal with mule accounts, which are frequently used by cyber criminals to receive and transfer money obtained through online frauds. The Court instructed the RBI to provide copies of the SOP to the Registrars General of all High Courts so that subordinate courts are also made aware of the procedures.

The Court further directed all States, Union Territories and law enforcement agencies to ensure the prompt implementation of grievance redressal and money restoration modules aimed at helping victims recover funds lost in cyber fraud cases. Authorities have also been asked to create public awareness about these mechanisms so that victims can report cyber crimes quickly and seek timely relief.

To improve accountability, the Supreme Court sought state-wise and bank-wise reports detailing the number of cyber fraud grievances registered and resolved. It also directed authorities to expedite cases involving frozen bank accounts and instructed the Inter-Departmental Committee to consult banks, payment intermediaries and other stakeholders on measures to prevent digital arrest scams and strengthen mechanisms for recovering defrauded money.

In a separate order concerning road safety and insurance compliance, the Supreme Court directed the Central Government to develop a pilot project linking the sale of fuel with the existence of valid third-party motor insurance. The proposal aims to prevent uninsured vehicles from purchasing fuel at petrol pumps until the mandatory insurance coverage is obtained.

A Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra observed that nearly 56 percent of vehicles operating on Indian roads are uninsured, describing the situation as “shocking” and a matter of serious concern.

The Court also directed the Insurance Regulatory and Development Authority of India (IRDAI) and the Central Government to implement a pilot project using Automatic Number Plate Recognition (ANPR)-based insurance verification. The technology would identify uninsured vehicles at fuel stations and improve compliance with the mandatory third-party insurance provisions under the Motor Vehicles Act.

The directions are expected to strengthen cyber fraud prevention, improve recovery of money lost in online scams, enhance coordination among banks and enforcement agencies, and promote greater compliance with compulsory motor insurance requirements across the country.

Title: Supreme Court Directs RBI to Frame Cyber Fraud SOP, Orders Pilot Linking Fuel Sales to Motor Insurance