SC remarks on Digital Fraud : The Supreme Court has made an important comment in the case of embezzlement of more than Rs 54 thousand crore through digital fraud. The country’s top court has called it robbery. Along with this, the court reprimanded the banks and said that some banks seem to be forgetting their responsibility as custodians of public money. The Supreme Court has directed the Center to formulate standard operating procedures to deal with these crimes in consultation with stakeholders such as RBI, banks and the Department of Telecommunications.

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A bench of Chief Justice (CJI) Justice Surya Kant, Justice Joymalya Bagchi and Justice NV Anjaria said the amount embezzled through digital fraud is more than the budget of many small states. Regarding the increasing digital arrest cases across the country, the bench said, many times bank officials are seen meeting with the accused, due to which such big cyber crimes are becoming possible. Banks will have to develop effective warning mechanisms to protect customers from fraud. If a customer, especially a pensioner or retired person, who normally transacts Rs 10 or 20 thousand suddenly starts transacting amounts of Rs 25 or 50 lakh, banks should immediately issue an alert.

During the hearing, the Central Government told the court that an inter-departmental committee has been formed for better coordination between various agencies. Also, banks are now identifying suspicious transactions with the help of AI to prevent fraud. The court directed CBI, RBI and Ministry of Electronics and Information Technology to take immediate action in mutual coordination. At the same time, senior lawyer NS Nappinai, amicus curiae in the case, said that banks should be forced to give alerts to customers on suspicious transactions and AI based tools can be used for this. He also said, merely issuing the RBI circular is not enough but penalties should also be imposed on banks for non-compliance.

The bench also noted that RBI has prepared SOP for taking action of blocking debit cards to prevent cyber fraud if there is suspicion of it. The bench asked to implement the SOP across the country. Instructed CBI to identify cyber criminals. In the new directions, the Supreme Court asked the Union Home Ministry to consider the Standard Operating Procedure (SOP) of the RBI and similar SOPs or decisions of the Department of Telecommunications (DOT). Also, asked to prepare a draft agreement within four weeks to effectively deal with such crimes.

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