A plan to hunt down digital arrest crooks takes shape

To crack down on surging online financial frauds such as 'digital arrests', a parliamentary panel has recommended that banks use government-issued IDs to trace, freeze and blacklist mule accounts siphoning crores of rupees. Experts call it a crucial first step, but banks warn implementation will be difficult.

- Shouvik Das, Shayan Ghosh & Manas Pimpalkhare

Discussions have begun at ministerial levels to understand how the recommendations by a parliamentary standing committee on home affairs can be implemented to reduce the extent of online financial frauds in India, said officials with direct knowledge of the matter.

"One proposal...has been to freeze all accounts linked to an ID (such as Aadhaar or PAN) in case a fraudulent transaction is detected. The second proposal is to blacklist the ID itself, so that perpetrators cannot reuse stolen documents to open unlimited accounts," one of them said, requesting anonymity.

"The objective is to narrow down the path that cyber criminals follow to distribute money in fragments across hundreds of accounts." the official added.

Digital arrests have emerged as a menace for users across the internet. Overall, money lost to online financial frauds nearly tripled last year to ₹21,181 crore, according to the National Cybercrime Reporting Portal.

Of this, only 2,530 croreabout 12% of the total amountwas frozen or recovered.

Overall, NCRP received more than 2 million complaints related to online financial frauds last year.