Supreme Court of India / Wikimedia Commons (GODL-India). Cropped.
A person who loses money in a digital arrest scam today has a narrow route to a refund from the bank. The Supreme Court wants it widened, and the Reserve Bank of India's new rules are due by the end of this month.
Under an RBI circular of 24 June, an individual who loses up to ₹50,000 in a fraudulent electronic transaction can get 85 per cent of the net loss or ₹25,000, whichever is lower, once in a lifetime. The loss must be reported to the bank and on the national cybercrime portal or helpline 1930 within five days. Someone who loses ₹40,000 can therefore get ₹25,000 at most.
In an order passed on 29 October and published this week, a bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana said the RBI's new rules must require banks to compensate victims for no less than the amount lost where the fraud happened because the bank failed in due diligence. The court also asked for safeguards before money leaves an account: holding transactions that do not fit an account's history, alerting the nearest police station and verifying such transfers in person.
The court said the RBI's amended Know Your Customer directions are to be notified by 30 November. A draft of those rules sets out how banks should freeze suspected mule accounts, but does not itself provide for compensation.
The difference matters most to retired people and small savers, whose accounts rarely move large sums. The court has asked state police for details of digital arrest FIRs and WhatsApp for its plans to stop such scams. The case returns on 23 November.
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