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The Supreme Court has expressed strong displeasure on the banks over the continuously increasing incidents of digital fraud, especially in cases to ‘digital arrest’. The court said in clear words that the first responsibility of banks is the safety of customers, but serious negligence is being seen in stopping suspicious transactions in time. Along with this, the Supreme Court also questioned the Reserve Bank of India (RBI) as to why strict policy decisions were not taken despite such huge losses.

A bench headed by Chief Justice Surya Kant made the remarks when it heard the status report filed by the Central government, the Ministry of Home Affairs (MHA) and the Ministry of Electronics and Information Technology (MeitY).

Questions raised on customer safety

The court said that not flagging suspicious transactions in time is a very serious issue. Referring specifically to the cases of the elderly, the Court said that for them this loss is equivalent to their entire life’s earnings. The court raised questions on the working style and professionalism of the banks and asked why immediate action is not taken after receiving the complaint.

Why are transactions not suspended?

The bench also questioned why transactions are not immediately suspended when unusual activity is seen in an account. Also, why not make arrangements to send alerts to customers and cyber crime police, even though it is technically possible.

The court said that both government and private banks do not intervene timely in the name of saving the customers from inconvenience, due to which the common people have to suffer the consequences.

government’s side

The Attorney General told the court that work is underway to finalize SOPs to deal with digital arrest cases. MHA and MeitY have filed two status reports, while RBI has prepared a draft SOP regarding the grievance redressal process of banks.

The Supreme Court directed the MHA to formally implement the SOP prepared by January 2, 2026 and asked it to ensure better coordination among the agencies to recover the stolen money.

Question on RBI also

The Supreme Court asked RBI why strict rules were not made when public reports revealed that more than ₹54,000 crore had been sent abroad through digital fraud. The court also said that sudden large transactions from the accounts of retired people and small depositors must be flagged.

The court indicated that it may issue further directions in the matter and sought a fresh status report after four weeks.