SC gives RBI four weeks to frame SOP on cyber fraud accounts

Stressing coordinated action, the court sought wider adoption of grievance and money restoration modules to ensure quicker relief for cybercrime victims

Observing that mechanisms to tackle cybercrimes needed “wider adoption, faster implementation and continued follow-up”, the Supreme Court (SC) on Tuesday asked the Reserve Bank of India (RBI) to prepare and circulate a Standard Operating Procedure (SOP) in four weeks to deal with bank accounts linked to cyber frauds, including mule accounts.

The Bench was hearing a suo motu matter, In Re: Victims of Digital Arrest Related to Forged Documents. After perusing the consolidated status reports and hearing Attorney General R Venkataramani on behalf of the Government, a Bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana said, “While the progress reported at this stage is appreciable, the mechanisms already put in place require wider adoption, faster implementation, and continued follow-up.”

The Bench issued interim directions and said, “The Reserve Bank of India shall, within four weeks, prepare and circulate an SOP for dealing with mule accounts/accounts linked to money laundering activity and cyber-enabled fraud. A copy of the final SOP shall be furnished to the Registrar General of all High Courts.”

Issuing a slew of nationwide directions aimed at strengthening the response to cyber-enabled financial frauds, the Bench directed all States, Union Territories (UTs) and law enforcement agencies to ensure the expeditious adoption and operationalisation of the grievance redressal and money restoration modules developed for victims of such frauds.

It also asked States, UTs and law enforcement agencies to ensure “expeditious adoption and operationalisation” of the grievance modules, namely, “the Grievance Redressal Module and the Money Restoration Module” under the Ministry of Home Affairs’ SOP concerning the National Cyber Crime Reporting Portal (NCRP). “They shall also take appropriate steps to ensure public awareness of these two modules,” the Bench said. It also asked the Registrar General of High Courts to apprise all courts and other adjudicating authorities of the grievance redressal mechanism to enable them to deal with freezing of bank accounts involved in cyber frauds.

“An aggrieved person may ordinarily be encouraged to avail of the said mechanism in the first instance. However, doing so shall not operate as a bar to the exercise of any constitutional, statutory or other legal remedies available in law,” it said.

It asked the authorities to provide in their next status reports the “State-wise and bank-wise data” of grievances registered and disposed besides the summary of restoration orders issued and the amounts restored with the victims.

On the issue of State Cyber Crime Coordination Centres and registration of e-Zero FIRs, the Bench noted that so far only 18 States have established such centres and asked the remaining states to “notify and operationalise” such centres within four weeks.

It also asked them to take steps to adopt the e-Zero FIR mechanism, in consultation with the Indian Cyber Crime Co-ordination Centre (I4C). “The I4C shall ensure necessary follow-up and provide the requisite assistance to the States for implementation of these directions,” the Bench added.

“The concerned authorities shall take appropriate steps to ensure the expeditious disposal of matters relating to the freezing of bank accounts arising out of cyber-enabled financial frauds,” it further directed.

The bench directed the Inter-Departmental Committee to issue necessary directions, advisories and instructions to all States, UTs, ministries and Government departments to undertake and promote awareness programmes relating to cybercrimes, including digital arrest scams.

“The Inter-Departmental Committee shall consult with banks and intermediaries regarding technological measures that may be adopted to prevent digital arrest scams, assist in the recovery of defrauded amounts, facilitate investigation of digital arrest cases; and ensure cooperation and compliance with all applicable statutory obligations and legal requirements… The Inter-Departmental Committee is directed to examine and discuss the proposal for a shared liability and victim compensation framework,” it said.

At the outset, the bench referred to earlier directions and said that they were issued to secure a coordinated response from the concerned ministries in relation to digital arrest scams.

“Those directions concerned, inter alia, investigation by the CBI, mule accounts, misuse of SIM cards and SIM boxes, cooperation by intermediaries, grievance redressal and restoration of defrauded money, and institutional coordination,” it said.