SC Urges Banks to Combat 'Digital Arrest' Scams, Cautions Against Profit Over Public Trust

• Supreme Court directs banks to strengthen safeguards against 'digital arrest' scams, emphasizing their role as trustees of public money.
• A bench led by CJI Surya Kant highlighted that over Rs 52,000 crore was siphoned off through online frauds between April 2021 and November 2025.
• RBI has prepared a Standard Operating Procedure (SOP) for banks, including temporary debit freezes, which the MHA is asked to adopt.
• Amicus curiae suggested AI-driven systems for banks to notify customers of doubtful transactions and empower the RBI Ombudsman.
• CJI Kant questioned why bank AI tools fail to flag suspicious large withdrawals from accounts like a pensioner's, stressing the need for proactive detection.