New Delhi: Taking serious cognisance of the alarming rise in “digital arrest” and online financial fraud cases, the Supreme Court of India has issued stringent directives to social media platforms, including WhatsApp, and the banking sector. The top court has demanded a comprehensive action plan from these entities detailing their measures to curb cyber crimes and protect innocent citizens.
A three-judge bench headed by Chief Justice of India (CJI) Surya Kant, which took suo motu cognisance of the digital arrest menace, mandated that tech companies must share their anti-fraud strategies with the Indian Cyber Crime Coordination Centre (I4C). The court observed that the responsibility of preventing cyber fraud does not lie solely with the scammers and digital platforms, but equally with the banking system.
During the hearing, senior advocate Kapil Sibal, representing WhatsApp, informed the bench that the messaging platform has already taken action against approximately 9,400 accounts linked to suspicious activities. He added that WhatsApp is actively developing a specialised software designed to identify dubious accounts and issue timely warnings to users. In response, the Supreme Court directed WhatsApp and other relevant digital platforms to present their technological solutions to the I4C, ensuring a collaborative approach to tackling cyber crime.
The apex court also raised critical questions regarding the accountability of banks. The Chief Justice pointedly asked why financial institutions fail to take immediate preventive action when a customer suddenly begins transferring unusually large sums of money, completely out of sync with their typical transaction history. The bench suggested that banks should implement mechanisms to temporarily block such suspicious transfers and immediately alert the cyber police. Crucially, the court indicated that if a customer falls prey to cyber fraud due to banking negligence, the bank should be held liable to compensate the victim.
Furthermore, the Supreme Court has set its sights on the Reserve Bank of India’s (RBI) proposed KYC amendment directives for 2026. The bench emphasised that these new regulations must include specific provisions for compensating victims of digital arrests and cyber fraud. The proposed RBI rules are slated to be notified by November 30, 2026, and implemented by December 31, 2026. The court has also asked the RBI to submit a complete list of all authorised financial institutions before the next hearing.