SC issues directions to tackle digital fraud, asks RBI to circulate SOP on mule accounts

New Delhi: The Supreme Court on Tuesday asked the Reserve Bank of India to prepare and circulate a standard operating procedure (SOP) for dealing with bank accounts linked to cyber frauds, including mule accounts.

Issuing a slew of directions aimed at strengthening the response to cyber-enabled financial frauds, a bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana directed all states, Union Territories (UTs) and law enforcement agencies to ensure the expeditious adoption and operationalisation of the grievance redressal and money restoration modules developed for victims of such frauds.

The bench was hearing a suo motu matter 'In Re: Victims of Digital Arrest Related to Forged Documents'.


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The bench also directed the RBI to provide copies of the SOP to the Registrars General of all high courts. It also asked states and UTs to undertake appropriate public awareness measures to ensure that citizens are informed about these mechanisms.

The Registrars General of all high courts were directed to apprise courts about the grievance redressal and money restoration modules so that victims are made aware of the available remedies.

Seeking greater accountability, the bench asked the authorities to submit a report containing state-wise and bank-wise details of grievances registered and disposed of under the cyber fraud redressal mechanism.

It further directed authorities to ensure the prompt disposal of cases relating to the freezing of bank accounts in cyber fraud investigations.

The bench also asked the Inter-Departmental Committee (IDC) constituted by the Centre to consult banks and financial intermediaries on measures to prevent 'digital arrest' scams and facilitate the recovery of money defrauded from victims.

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The directions come a week after the apex court suggested that the Centre consider formally defining 'digital arrest' in criminal law and treating it as a standalone offence carrying stringent punishment.