New Delhi: No police officer in India can arrest anyone over a phone or video call. Yet thousands of people, many of them educated, keep handing their savings to callers who claim otherwise. On Friday, the Supreme Court moved to shift part of that cost.
A three-judge bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V Mohana, in an order dated October 29, said the Reserve Bank of India's new rules must make financial institutions indemnify victims by an amount "not less than equivalent to the amount lost" where the fraud resulted from a failure of due diligence on the bank's part.
Banks would have to do three things: temporarily suspend transactions that fall outside an account's usual pattern, automatically inform the nearest police station about them, and physically verify that the transaction is genuine before releasing the money.
"We will put up a strict liability on the financial institutions," Justice Bagchi said during the hearing. Chief Justice Kant said banks would not mend unless they faced penalties, and that liability must sit on the bank itself, not just on the officer involved, with "zero debit" in the victim's account.
The bench was blunt about the victims. "What is wrong with these victims? How are these victims being trapped like this? They can't understand this basic thing? What's the fear of arrest on mobile?" the Chief Justice asked, noting that a person could simply disconnect the call.
The RBI did not escape. "The problem is bank officials are involved in it. There is soft pedalling by the RBI. Unfortunate. Because RBI is consulting the banks when we are asking for action against the banks," the Chief Justice said.
Figures placed before the court by the Indian Cybercrime Coordination Centre show complaints rising from 39,925 in 2022 to 1,23,672 in 2024, with reported losses of about Rs 1,935 crore that year. Complaints fell to 58,239 in 2025, with losses of about Rs 1,211 crore, and between January and August 2026 there were 21,928 complaints and losses above Rs 647 crore.
The court wants to see the RBI's KYC Amendment Directions, 2026 before issuing its own directions. The RBI must notify them by November 30 and bring them into force by December 31. The Centre told the court it had blocked 9,400 accounts in coordination with WhatsApp, MeitY and the Department of Telecommunications.
The case began with a complaint from a senior citizen couple in Ambala who lost Rs 1.05 crore to people posing as CBI, ED and judicial officials.