'Absolute robbery': SC raps banks over digital frauds, asks Centre to frame SoP

The Supreme Court on Monday came down heavily on the massive outflow of money through cyber-enabled frauds, describing the siphoning of over Rs 54,000 crore as nothing short of "absolute robbery or dacoity", and directed the Centre to frame a comprehensive standard operating procedure in consultation with the Reserve Bank of India, banks, and the Department of Telecommunications.

- OUR CORRESPONDENT

A three-judge bench led by Chief Justice of India Surya Kant, with Justices Joymalya Bagchi and N V Anjaria, expressed deep alarm over the rapid spread of digital arrest scams and said financial institutions must adopt a far more proactive stance in preventing such crimes. The court underlined that banks, as custodians of public money, have a fiduciary responsibility to monitor unusual transactions and alert customers when suspicious activity is detected.

The bench pointed out that if a retiree who typically withdraws Rs 10,000 or Rs 20,000 suddenly attempts to withdraw several lakhs or crores, the bank should automatically flag the transaction and issue a real-time alert. It observed that such basic safeguards were either missing or inadequately implemented, leaving vulnerable individuals exposed to sophisticated fraud networks. Noting that the amount lost to digital fraud exceeds the annual budgets of many small states, the court said the scale of the problem suggested possible collusion or negligence on the part of some bank officials.

It stressed that both the RBI and commercial banks must act with urgency and accountability.