India’s Supreme Court has delivered a scathing indictment of the nation’s banking sector, condemning systemic failures and alleged collusion in a massive ₹520 billion (approximately $6.3 billion) digital fraud scheme targeting citizens. The landmark ruling came during proceedings initiated by the court itself (suo motu) regarding sophisticated ‘digital arrest’ scams that have victimized thousands nationwide.
Justice Surya Kant, presiding over the case, declared the unprecedented financial hemorrhage between April 2021 and November 2025 constituted ‘absolute robbery,’ noting evidence that bank officials appeared ‘completely hand in glove with the accused.’ The court characterized financial institutions as becoming ‘a liability’ despite their fiduciary responsibility as trustees of public funds.
The sophisticated fraud operation involved criminals impersonating senior police and security officials to falsely inform victims—predominantly elderly citizens—of their implication in fictitious drug smuggling cases. Through psychological manipulation and fabricated legal threats, perpetrators gained remote access to bank accounts, systematically draining life savings under the guise of ‘digital arrests.’
The judicial intervention followed a petition from an elderly couple defrauded of ₹15 million after scammers impersonated judicial authorities. In response, the court has mandated urgent reforms: directing the Central Bureau of Investigation to lead investigations, ordering the Home Ministry to formally implement the Reserve Bank of India’s January 2026 Standard Operating Procedure within two weeks, and establishing nationwide protocols for temporary debit freezes during suspected fraud incidents.
The ruling emphasizes enhanced inter-agency coordination and represents one of India’s most significant judicial responses to cyber-enabled financial crime, highlighting institutional accountability in protecting vulnerable citizens from technologically sophisticated predation.