India's Supreme Court is asking whether banks should repay 'digital arrest' scam victims, as losses pass ₹3,000 crore. Here is how the scam works and what to do.
India's Supreme Court has asked whether banks should pay back people who lose money to 'digital arrest' scams. At a hearing on October 29, judges questioned the banking system's role in stopping these frauds. Total losses are now above ₹3,000 crore. No ruling has been announced.
Chief Justice of India Surya Kant led a three-judge Bench that also included Justices Joymalya Bagchi and V Mohana. The Bench criticized the Reserve Bank of India (RBI), the country's central bank, for how it has responded to this crime. It also asked how educated people keep falling for arrest threats made over phone and video calls.
The court raised concerns about very large transfers out of personal accounts, especially those of senior citizens, with little checking. It suggested banks could be held financially responsible if careless monitoring helped victims lose their money.
Criminals pretend to be police officers, CBI or Enforcement Directorate officials, or even judges. They accuse the victim of crimes such as money laundering or drug trafficking. They show forged documents and keep the victim on long video calls. Then they demand money for supposed verification.
No real agency arrests anyone over a video call or asks for money. That one fact breaks the whole scam.
Figures from the Indian Cybercrime Coordination Centre, given to the court, show how fast this grew. Complaints rose from 39,925 in 2022 to 1,23,672 in 2024, with losses reaching ₹1,935 crore. In 2025, there were 58,239 complaints involving ₹1,211 crore. From January to August 2026, another 21,928 complaints reported losses above ₹647 crore.
Bank customers in India are the most directly affected, especially older people. Families and small businesses can also get these calls. The court's questions and the RBI's ideas concern banks in India. The material does not say whether any other country is looking at similar rules.
The alert box above lists the steps. The short version: hang up, send no money, and speak to a family member or your bank before any large transfer. Do not trust a call because the caller has official-looking papers.
The RBI is considering revised KYC guidelines. KYC is the identity checking banks do on customers. It is also weighing temporary debit holds on suspicious transactions and a proposed emergency 'kill switch' that would immediately stop banking operations when fraud is suspected.
It is not yet known whether the court will order banks to compensate victims, or what conditions would apply. It is also unclear when the RBI will decide on its proposals. Until then, the best protection is still the caller's own behavior: if someone threatens arrest and asks for money, it is a scam.
No real officer arrests you on a video call or asks for money, so hang up and call someone you trust before moving any funds.
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