Committee on digital arrests looks at fixing liability for citizens’ losses

The Centre has constituted a high-level Inter-Departmental Committee to tackle digital arrest scams, with the panel deciding in its first meeting that victims should not bear losses attributable to negligence by banks, telecom providers or other regulated entities, the government informed the Supreme Court in a status report filed on Tuesday.

At the December 29 meeting, the Central Bureau of Investigation (CBI) proposed splitting investigative responsibilities by monetary thresholds—state and Union territory agencies would handle cases below a specified limit with technical support from the Indian Cyber Crime Coordination Centre, while CBI would take higher-value cases.

The committee also directed the Reserve Bank of India, Department of Telecommunications and Ministry of Electronics and IT to examine compensation mechanisms and suggest improvements.

The moves follow the Supreme Court’s suo motu cognisance of digital arrest scams, where fraudsters impersonate law enforcement officials to coerce money transfers. Chief Justice of India Surya Kant’s bench directed CBI to probe the scams, calling them organised and transnational.

The committee, chaired by the Special Secretary (Internal Security) in the Union ministry of home affairs, was constituted December 26 under Attorney General R Venkataramani’s guidance. It includes senior officers from multiple ministries, RBI, National Investigation Agency, Delhi Police and I4C, and will meet every two weeks.

Its terms of reference include examining enforcement challenges, considering recommendations from the court-appointed amicus curiae, identifying regulatory gaps and suggesting corrective measures.

Digital arrest scams have emerged as a major category within India’s cybercrime crisis, which saw over 2.2 million incidents and losses of ₹22,845 crore in 2024 — with 85% of cases involving online financial fraud, according to data tabled in Parliament.

The scams typically target elderly citizens and professionals through video calls, with fraudsters impersonating police, CBI or customs officials and keeping victims under psychological duress for hours or days while coercing large money transfers.

The court took cognisance October 17 after a 73-year-old Ambala woman wrote that fraudsters posing as CBI officials used fake Supreme Court orders to compel her to transfer over ₹1 crore. Through its president Vipin Nair, the Supreme Court Advocates on Record Association intervened, citing a similar case involving a woman advocate duped of more than ₹1 crore.

CBI told the committee during the December 29 meeting the scams are run by organised, transnational syndicates using sophisticated infrastructure and coordinated networks, with INTERPOL channels being used to dismantle modules. The chair directed I4C to share detailed case data with CBI to facilitate the threshold exercise. CBI also informed the panel it is organising a national cybercrime conference with I4C on January 10-11.

RBI said banks are governed by multiple advisories and master directions on fraud prevention and transaction monitoring. It said 23 banks have adopted the AI-based MuleHunter tool for detecting mule accounts and undertook to examine why others have not implemented it. The central bank is also finalising a standard operating procedure for freezing accounts in suspicious transactions, following Kerala High Court interim directions.

On proactive account freezing under Section 12AA of the Prevention of Money Laundering Act, RBI said a Union finance ministry notification would be required, while CBI maintained banks could act on predicate offences like cheating and theft before invoking PMLA.

The Department of Telecommunications said draft rules under the Telecommunications Act, 2023, addressing negligent SIM card issuance and multiple SIMs to individuals, are under stakeholder consultation. Draft rules for regulating SIM boxes are at an advanced stage.

MeitY said consultations are underway on intermediary obligations, technical feasibility and compliance mechanisms. It acknowledged the need to strengthen the adjudication mechanism under Section 46 of the Information Technology Act, 2000, potentially through a national online portal.

MeitY convened a meeting with major IT intermediaries January 6, attended by amicus curiae senior advocate NS Nappinai and representatives of Google, WhatsApp, Telegram and Microsoft, to discuss platform-level responses to digital arrest scams.

A separate virtual meeting was held January 2 between the amicus curiae and representatives of I4C, RBI, DoT and MeitY to clarify recommendations on SIM issuance, bank liability, intermediary obligations and victim redress mechanisms.

The government said DoT and RBI submitted detailed inputs after the first meeting, but responses from other members are awaited. It sought at least one month from the Supreme Court to complete consultations and place a consolidated outcome before the court.

The matter was scheduled for hearing Tuesday but could not be taken up due to paucity of time.