SC told the RBI that its proposed SOP must mandate banks to indemnify victims who lose money to digital arrest frauds, citing possible bank staff complicity.

NEW DELHI: Convinced of bank personnel’s complicity in cases of cyber fraudsters duping people by staging ‘digital arrest’, SC told Reserve Bank of India that its proposed Nov 30 standard operating procedure (SOP) must mandate every financial institution to indemnify those who lose money kept with banks to digital conmen.“How do fraudsters and cybercriminals know how much money is kept in which account? Without bank employees sharing this information with fraudsters, there is no possibility of them targeting individual account holders,” said a bench of CJI Surya Kant and Justices Joymalya Bagchi and V Mohana. It said the SOP, proposed to be released by Nov 30, must mandate banks to immediately intimate an account holder when they come across a high-value transaction on the account, distinct from past transactions and inform police.

It asked RBI to submit a list of banks and financial institutions to SC.Amicus curiae V S Nappinai told SC that the shared liability clause must also extend to the telecom service providers in addition to financial institutions. Noticing that most of spam calls for digital arrest are placed using WhatsApp, the bench asked the intermediary if steps can be taken to automatically end unusually long calls or devise a ‘kill switch’.