Supreme Court tightens rules to curb ‘digital arrest menace

Why in News?

The Supreme Court has directed the Reserve Bank of India (RBI) to prepare and circulate a Standard Operating Procedure (SOP) for dealing with mule accounts and bank accounts linked to cyber fraud.

The Court also issued several directions to States, Union Territories, law-enforcement agencies and banks to strengthen grievance redressal and ensure the quick restoration of money lost through digital fraud.

Key Directions of the Supreme Court

• The RBI has been directed to prepare and circulate a standard SOP for handling mule accounts and cyber-fraud-linked bank accounts.
• Copies of the SOP will be provided to the Registrars General of all High Courts.
• States, UTs and law-enforcement agencies have been directed to operationalise grievance-redressal and money-restoration modules.
• Authorities have been asked to ensure expeditious restoration of defrauded money.
• States and UTs have also been directed to create public awareness about these mechanisms.
• Registrars General of High Courts have been asked to inform subordinate courts about the availability of these modules.

Cyber Fraud Trend

According to the Indian Cybercrime Coordination Centre (I4C) status report, complaints registered on the National Cyber Crime Reporting Portal declined from 1,23,672 in 2024 to 58,249 in 2025, while 16,377 complaints were recorded during the first six months of 2026. The Supreme Court described the declining figures as encouraging.

What are Mule Accounts?A mule account is a bank account used to receive, transfer or withdraw money obtained through illegal activities such as cyber fraud. Fraudsters often use multiple mule accounts across different States to quickly move stolen money, making it difficult for investigators to trace and recover the funds.

Common Methods of Digital Fraud

Fraudsters frequently impersonate police officers, government officials or other authorities and use fear and urgency to deceive victims. They may falsely claim that:

• A parcel linked to the victim contains illegal goods, drugs or fake passports.
• A family member has been involved in a crime or accident and is in police custody.
• The victim must pay money to settle or compromise a case.

Digital Arrest Scam

In some cases, victims are subjected to so-called “digital arrest”, where fraudsters force them to remain continuously visible on Skype or other video-conferencing platforms until their monetary demands are fulfilled. Fraudsters may use:

• Fake police stations and government-office setups.
• Police or government-style uniforms.
• Fake documents and official-looking communications.
• Deepfake videos to impersonate officials.

How Fraudsters Hide Their Identity

Cybercriminals are increasingly using sophisticated technologies and networks to evade investigation. They may:

• Route calls through SIM boxes to make foreign-origin calls appear as Indian numbers.
• Use multiple mule accounts to rapidly transfer funds.
• Employ deepfakes during video calls.
• Use multiple mobile devices and SIM cards to remain difficult to trace.

Government Measures Against Cyber Fraud

• Indian Cyber Crime Coordination Centre (I4C)
  • The I4C, under the Ministry of Home Affairs (MHA), coordinates efforts to combat cybercrime across India.
  • It works with state and UT police authorities, RBI and financial institutions, other ministries and government agencies, technology companies.
  • I4C provides technical inputs and support to State and UT police for identifying and investigating cybercrime cases.
  • Blocking Fraudulent Digital Infrastructure: I4C has facilitated measures to block SIM cards, Mobile devices, Mule bank accounts, digital identities and communication channels associated with fraud.
  • In collaboration with Microsoft, I4C has also blocked more than 1,000 Skype IDs involved in digital-arrest-related activities.
  • CyberDost: I4C also conducts public awareness campaigns through CyberDost, using platforms such as X, Facebook and Instagram. These campaigns use infographics and videos to educate citizens about cyber fraud and safe digital practices.
• CBI Launches ‘ABHAY’
  • The Central Bureau of Investigation (CBI) has launched ABHAY – AI-Based Helpbot for Authentication of CBI Notices.
  • It is a real-time notice-verification system designed to help citizens verify whether a notice purportedly issued by the CBI is genuine.
  • The initiative aims to protect citizens from fake CBI notices, impersonation fraud and digital-arrest scams.

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