New Delhi/Alive News: The Supreme Court on Thursday said banks should be held accountable for compensating victims of digital fraud if investigations establish that the losses resulted from a failure by financial institutions to follow due diligence requirements.
The court said victims of scams such as digital arrest should receive compensation for their losses when a bank or other financial institution is found responsible for failing to meet its obligations.
A Bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana said it would examine the Reserve Bank of India’s (RBI) proposed Know Your Customer (KYC) amendments, which are scheduled to be implemented by December 31, 2026.
The Bench stressed that the regulatory framework should include appropriate provisions to compensate victims when financial institutions fail to fulfil their due diligence responsibilities. It also said banks should alert nearby police stations about suspicious transactions involving customers who may be victims of fraud.
Supreme Court Asks RBI to Outline Measures for Victims
The Supreme Court has asked the RBI to provide details of the banks that will be covered by its proposed guidelines on digital arrest fraud. It also sought information on measures to help victims recover their losses.
The court is examining ways to strengthen safeguards against cyber-enabled financial crimes and ensure that victims receive appropriate relief.
Digital Fraud Victims Lose Over ₹800 Crore This Year
The Supreme Court observed that although digital crimes have reportedly declined by around 50 per cent, victims have still lost more than ₹800 crore to such offences so far in 2026.
The court is monitoring the matter titled In Re: Victims of Digital Arrest Related to Forged Documents as part of its efforts to improve the institutional response to digital fraud.
WhatsApp Allowed to Intervene in Digital Arrest Case
The Supreme Court has also allowed WhatsApp to intervene in the proceedings concerning digital arrest scams.
During the hearing, WhatsApp informed the court that it had banned 9,400 suspicious accounts as part of its efforts to tackle such activities.
The platform’s participation comes amid concerns about fraudsters using digital communication services to impersonate law enforcement officials and trick people into transferring money.
₹35 Crore Missing from PNB Accounts in Greater Noida
The Supreme Court’s observations come amid concerns over the reported disappearance of ₹35 crore from accounts at a Punjab National Bank (PNB) branch in Greater Noida.
Several customers reportedly found zero balances in their fixed deposit accounts. Others who had ₹3–4 lakh in their savings accounts allegedly found only ₹16,000 remaining.
Following the incident, PNB’s regional office in Sector 1, Noida, suspended five employees, including the branch manager. New staff members were appointed to replace them.
Bank officials reportedly assured customers that the missing money would be credited back to their accounts by Thursday.
