Law Notify, January 15, 2026 : The Supreme Court of India has been informed that an inter-departmental committee set up by the Ministry of Home Affairs is examining whether banks, telecom companies and other intermediaries can be held accountable for financial losses suffered by victims of so-called digital arrest scams.
The committee was constituted after the apex court took suo motu cognisance of a surge in cyber fraud cases where victims are coerced by impostors posing as police officers or government officials. In these cases, victims are threatened with arrest or legal action and pressured into transferring money.
In a status report placed before the court, the panel said accountability needs to be strengthened wherever institutional lapses contribute to losses. It noted that compensation could be justified if banks or telecom service providers fail to follow prescribed safeguards, ignore warning signs, delay timely intervention, or enable fraud due to deficient systems or processes.
The committee is headed by a senior MHA official and includes representatives from the Reserve Bank of India, Department of Telecommunications, Ministry of Electronics and Information Technology, and the Indian Cyber Crime Coordination Centre, among other agencies. Its mandate covers a review of existing laws, enforcement gaps and remedial frameworks related to cybercrime.
The report also outlined steps being taken by regulators. These include RBI initiatives to strengthen real-time fraud detection and standardise procedures for freezing suspicious bank accounts, as well as DoT measures to prevent misuse of telecom resources through tighter SIM issuance norms.
On victim relief, the panel observed that current compensation mechanisms need refinement to ensure quicker and more effective redress. It has sought additional time to submit detailed recommendations on institutional responsibility and compensation frameworks.
The Supreme Court has listed the matter for further hearing, where it will consider the committee’s findings and issue appropriate directions to tackle the growing threat of digital fraud.
