‘Banks must pay victims of digital fraud’:SC asks RBI to take steps to provide relief; gives WhatsApp power to intervene in digital arrests

Banks must be made accountable to indemnify losses of victims of digital fraud, said Supreme Court (SC) on Thursday. SC added that victims of offences like digital arrests should receive compensation of at least the amount lost if the fraud is found to have resulted from a failure of due diligence by the financial institution. A bench comprising Chief Justice Surya Kant and justices Joymalya Bagchi and V Mohana said it would examine the RBI’s KYC amendment directions to be operationalised by 31 December, 2026. The bench stressed that the proposed regulatory framework must provide for suitable compensation to victims where financial institutions are found to have failed in their due diligence obligations. The top court added that it is duty of banks to alert neighbouring police stations about unusual transactions by customers being duped. Provide steps that you will take for digital fraud victims: SC to RBI SC has asked the RBI to provide list of banks to be regulated by its guidelines on digital arrest and measures to make up for losses of victims. Victims lost ₹800 crore to digital frauds this year SC said that though digital crimes have decreased by 50%, yet victims lost ₹800 crore to such offences this year so far.
SC allows WhatsApp to intervene in few digital arrest cases The top court also allowed WhatsApp to intervene in suo motu proceedings related to digital arrest. WhatsApp told SC that it has banned 9,400 suspicious accounts so far. The matter, titled In Re: Victims of Digital Arrest Related to Forged Documents, is being monitored by the Supreme Court as part of efforts to strengthen the country s institutional response to cyber-enabled financial fraud. Apex court’s observations come amid ₹35 crore PNB heist: The apex court’s observations came amid the growing concern of ₹35 crore heist from Punjab National Bank (PNB) in Greater Noida. ₹35 crore had reportedly gone missing from accounts at a PNB branch in Greater Noida. Customers who had opened fixed deposits (FDs) saw zero balances in their accounts. Meanwhile, customers who had ₹3–4 lakh in their savings accounts were reportedly left with just ₹16,000. After the matter came to light, PNB’s regional office in Sector 1, Noida, had suspended five employees, including the bank manager. New staff were appointed in their place. Bank officials had assured customers that their money will be credited back to their accounts by Thursday.