The Supreme Court has directed WhatsApp and other intermediaries to submit details of the measures they propose to undertake to prevent digital arrest scams and related cybercrimes in the country.

A Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V Mohana directed the intermediaries to place their proposals before the Court as well as the Indian Cybercrime Coordination Centre (I4C).

The direction was issued in the case titled In Re: Victims of Digital Arrest Related to Forged Documents. The matter has been listed for further hearing on November 23.

During the hearing on October 29, Senior Advocate Kapil Sibal, appearing for WhatsApp, informed the Court that the platform had undertaken several preventive measures, including action against approximately 9,400 accounts. He also submitted that WhatsApp would file an affidavit detailing the steps taken to tackle such frauds.

Sibal further informed the Bench that the platform was developing software to identify suspicious accounts and alert users about potential scams.

Recording the submissions, the Court directed:

“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.”

Banks Must Compensate Victims For Cyber Frauds Linked To Failure Of Due Diligence: Supreme Court

During the October 29 hearing, the Supreme Court had emphasised that financial institutions must be held accountable for digital arrest scams and other forms of cyber fraud.

The Bench observed that banks should be required to compensate customers for financial losses 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 Court said.

During the hearing, Chief Justice Surya Kant had questioned why banks could not intervene when customers attempted to transfer unusually large amounts that were inconsistent with their regular transaction patterns.

The Court also highlighted several safeguards that financial institutions should adopt, including temporarily suspending suspicious transactions that deviate from an account holder's usual transaction history, automatically alerting the nearest police station and conducting physical verification to ascertain the genuineness of such transactions.

“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 order stated.

To ensure effective implementation of the proposed regulatory framework, the Court also directed the RBI to submit a list of all authorised financial institutions before it on the next date of hearing.

The Bench noted that although cybercrimes had declined by 50 per cent, victims had collectively lost approximately ₹800 crore so far this year. It emphasised that the RBI's proposed regulatory framework must contain enforceable provisions concerning compensation, preventive intervention and institutional accountability.

The CJI also indicated that the Court would first examine the proposed RBI Know Your Customer (KYC) Amendment Directions, 2026, before allowing the regulatory process to proceed.

The proposed directions are expected to be notified by November 30 and operationalised by December 31.

Describing banks as a "protective umbrella" for vulnerable customers, the CJI observed that financial institutions have access to account holders' transaction histories and other relevant information and must utilise such data to detect and prevent fraudulent transactions before the money leaves an account.

Attorney General R Venkataramani, appearing for the Centre and other authorities, informed the Bench that substantial steps had been taken to improve the detection of suspicious transactions and strengthen preventive mechanisms within the banking system.

States Asked To Submit Reports On Digital Arrest Scam Cases

The Supreme Court also directed law enforcement agencies across all States and Union Territories to submit reports detailing the FIRs registered in digital arrest scam cases and the investigations conducted pursuant to them.

The agencies have further been asked to provide suggestions on measures for preventing, detecting and prosecuting such offences.

The Directors General of Police (DGPs) of all States and Union Territories have been directed to ensure compliance with the order.

The reports are to be submitted to the inter-departmental committee coordinating the government's response to digital arrest scams. The Bench further directed that copies of the reports furnished to the Court be forwarded to the committee as well.