Digital Arrests | MHA Proposes SOP Before Supreme Court, RBI To Consider Staff Accountability & Liability Framework

In the suo motu case taken up by the Supreme Court over "digital arrest scams", the Ministry of Home Affairs has filed a status report proposing a Standard Operating Procedure to strengthen inter-agency coordination and ensure timely restoration of defrauded funds wherever possible.

It may be recalled that a bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice NV Anjaria is hearing the suo motu case. Pursuant to the Court's order, the MHA had constituted a High-level Inter-Departmental Committee (IDC) to comprehensively examine all facets related to "digital arrests”.

Recently, Attorney General R Venkataramani informed that the 2nd meeting of the IDC took place on February 2, where various stakeholders informed about the key steps taken so far. As per the latest status report submitted before the Court, the following measures have been apprised by various agencies : 

Central Bureau of Investigation (CBI):

Based on the data shared by I4C, CBI has identified digital arrest cases involving losses of ₹10 crore or more for investigation and the same will be taken up for investigation. Necessary action is being taken for obtaining consent under Section 6 of the Delhi Special Police Establishment Act, 1946.

Department of Telecom (DoT) : 

Multiple measures were taken including -

(a) Notification of Draft Telecommunications (User Identification) Rules, 2025 (Draft Rules) to address negligent SIM issuance, multiple SIMs and mule SIMs through biometric-based identification under the Telecommunications Act, 2023. The Draft Rules are likely to be notified within the next two months.

(b) Notification of draft Telecommunications (Radio Equipment Possession Authorisation) Rules, to deal with SIMBOX related issues.

(c) Issuance of directions for SIM binding and to fix the session duration to Telecommunication Identifier User Entities (TIUEs) providing app-based communication services in India, including WhatsApp, Telegram, Signal, Arattai, etc., on 28.11.2025, expected to curb VoIP-based digital arrest scams. 

(d) Action taken for enforcement, which includes penalties for non-compliant CAF cases (pending realisation), blocking of spoofed international calls (with implementation of CIOR), re-verification of mule SIMs, operationalisation of Sanchar Saathi and Digital Intelligence Platform (DIP)

(e) Further actions to finalise and notify the Telecommunications (User Identification) Rules, 2025; examine the feasibility of a victim compensation framework in coordination with stakeholders; review gaps in bulk and corporate SIM issuance; identify SIM card supply chain fuelling cybercrime etc. 

Reserve Bank of India  :

The RBI informed the IDC of the following measures - 

(a) Deployment of AI Monitoring Tools: Adoption of "MuleHunter.ai" by 26 banks, while other institutions continue to utilize proprietary AI/ML systems.

(b) Application of PMLA Provisions: Evaluation of the applicability of Section 12AA of the Prevention of Money Laundering Act (PMLA) for the temporary suspension of suspicious transactions. This matter requires further legal scrutiny through a dedicated consultation involving the DOR, RBI, I4C, and the Ministry of Home Affairs (MHA). 

(c) SOP for Debit Holds: Formulation of a draft Standard Operating Procedure (SOP) for placing temporary debit holds to curb mule accounts and cyber fraud, in compliance with the directives of the Hon'ble High Court of Kerala.

(d) Compensation and Liability Framework: Development of a liability framework to address compensation in cases of authorized transactions induced by fraud is under consideration.

(e) Delayed Transaction Mechanisms: The feasibility of implementing delayed transaction mechanisms to mitigate fraud risks is under examination.

(f) System Integration: The feasibility of integration of the National Cybercrime Reporting Portal (NCRP) with the Account Aggregator and Central KYC (CKYC) frameworks to facilitate quick reporting is being worked out. 

(g) Staff Accountability: Establishment of strict accountability for personnel involved in KYC lapses or complicity, including the invocation of the Prevention of Corruption Act,1988, where applicable, will be done.

The Ministry of Home Affairs : 

The MHA stressed upon its proposed SOP for managing cyber financial fraud cases, specifically - 

(a) Account Management: Protocols for the freezing and unfreezing of bank accounts linked to cyber fraud incidents via the NCRP mechanism.

(b) Transaction Holds: Mechanisms for placing and rescinding liens on fraudulent funds within the banking system.

(c) Restitution Framework: Procedures for the refund and restoration of funds secured through the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS), utilizing the Online Money Restoration Module as the central mechanism for returning defrauded amounts to rightful owners. 

(d) Grievance Redressal: Establishment of a transparent, time-bound, and accountable online Grievance Redressal Mechanism for individuals aggrieved by unwarranted freezing, lien marking, or other enforcement actions.

(e) Monitoring & Oversight: Incorporation of internal mechanisms to monitor implementation and identify operational challenges during the SOP rollout.

(f) Legal Foundation: The SOP is grounded in statutory provisions of BNSS, PMLA and judicial orders in this regard, ensuring judicial oversight and legal remedy at every procedural stage. 

Ministry of Electronics and Information Technology (MeitY) : 

The MeitY informed of the following steps:

(a) Multi-Stakeholder Consultation: A high-level meeting was convened on January 6, 2026, with major intermediaries— including Google, Meta, and Microsoft, to review the efficacy of measures adopted to prevent the abuse of platforms in cases related to "Digital Arrests".

(b) Platform Compliance Review: It was observed that while Microsoft demonstrated expeditious action on intelligence shared by the I4C, WhatsApp has not taken adequate remedial action, despite prolonged engagement on the issue of Digital Arrests most of which is being perpetrated through WhatsApp.

(c) Enforcement of SIM Binding Protocols: Active pursuance of compliance with "SIM binding" directives issued by DoT by the concerned platforms.

(d) Strengthening adjudication mechanisms: Measures initiated to bolster the adjudication framework under the IT Act, 2000, specifically to facilitate victim compensation.

(e) Development of reporting infrastructure: Collaboration with the Centre for Development of Advanced Computing (CDAC) to develop a dedicated portal, which will facilitate the reporting of complaints under Section 43 of the IT Act and streamline the processing of compensation-related applications from the Adjudicating Authority.

As per the status report, the IDC has further noted that an Inter-Departmental sub-committee having representatives of RBI, DoT, MeitY, Ministry of Consumer Affairs and DoLA, has to be constituted to examine a shared liability framework for victim compensation involving banks, telecom service providers and intermediaries, along with the associated legal framework.

Case Title: In Re: Victims of Digital Arrest Related to Forged Documents, SMW (Crl.) 3/2025