Senior advocate Kapil Sibal, appearing for WhatsApp, said the platform was working on software to identify suspicious accounts and warn users. ( IANS )New Delhi: To prevent digital arrest scams and related cybercrimes in the country, the Supreme Court has asked WhatsApp and other intermediaries to apprise it of their proposed measures.Hearing a suo motu case titled ‘In Re: Victims of Digital Arrest Related to Forged Documents’ on October 29, a bench headed by Chief Justice of India (CJI) Surya Kant and comprising Justices Joymalya Bagchi and V Mohana asked the Meta-owned messaging platform and concerned intermediaries to simultaneously submit their proposals to the Indian Cybercrime Coordination Centre (I4C). The matter has been listed for further consideration on November 23.”WhatsApp LLC (A Meta company) and other concerned intermediaries are also directed to apprise this Court of the measures they propose to undertake to prevent the digital arrest scams and related cybercrimes. They shall also simultaneously submit their proposals to the I4C,” the bench said.Action Against 9,400 AccountsSenior advocate Kapil Sibal, appearing for WhatsApp, had argued before the bench that the platform had taken preventive measures, including action against 9,400 accounts, and would file an affidavit detailing the steps undertaken. He further said the platform was working on software to identify suspicious accounts and warn users. The apex court had observed that financial institutions must be held accountable for digital arrest scams and other cyber frauds, emphasising that banks should be required to compensate victims for losses suffered where an investigation establishes that the fraud occurred due to the institution’s failure to exercise due diligence.”We reiterate and emphasise that the regulatory measures proposed by the Reserve Bank of India (RBI) must mandate and incorporate suitable provisions that require financial institutions to indemnify victims of digital arrest scams and other cyber frauds and pay suitable compensation not less than the amount lost by the customer, where it is established that the fraud or crime occurred due to the failure on the part of the financial institution to exercise due diligence in preventing or reporting the act/incident,” the bench said in the order.Flags Unusually Large TransactionsDuring the hearing, the CJI Kant had questioned why banks could not intervene when customers suddenly attempted to transfer unusually large sums of money that were inconsistent with their established transaction patterns.”We have also emphasised in the past various preventive safeguards that must be mandated for every financial institution. These may include temporarily suspending unusual or suspicious transactions inconsistent with the account’s past transaction history, automatically intimating such transactions to the nearest police station, and subsequently physically verifying the reported transactions to ascertain their genuineness,” the CJI observed.The apex court had observed that financial institutions must be held accountable for digital arrest scams and other cyber frauds. (Getty Images)The bench further directed the RBI to submit a list of all authorised financial institutions before the court on the next date of hearing to ensure effective implementation of the regulatory measures proposed by the RBI, as well as the directions issued.Need Provisions for CompensationObserving that despite the fact that cybercrimes fell by 50%, victims lost Rs 800 crore so far this year, the bench said the proposed RBI regulatory framework must incorporate enforceable provisions for compensation, preventive intervention and institutional accountability.The CJI had said the bench would first examine the proposed RBI Know Your Customer (KYC) Amendment Directions, 2026, before permitting the regulatory process to proceed. The directions are proposed to be notified by November 30 and operationalised by December 31.Terming banks a “protective umbrella” for vulnerable customers, the CJI said financial institutions possess information about their account holders, including their transaction histories, and should use that knowledge to prevent fraud before money leaves an account.Asks Reports From States/UTsThe bench also directed the law enforcement agencies of all states and Union Territories to submit reports detailing FIRs registered in digital arrest scam cases and the investigations arising from them, along with suggestions for the prevention, detection and prosecution of such offences.The DGPs of all states/UTs have been directed to ensure compliance. The reports must be submitted to the inter-departmental committee coordinating the government’s response, with reports furnished to the court also being forwarded to the committee, the bench directed.Attorney General (AG) R Venkataramani, appearing for the Centre and other authorities, told the bench that substantial work had been undertaken to improve the detection of suspicious transactions and strengthen preventive mechanisms within the banking system.
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