The Supreme Court has asked WhatsApp and other intermediaries to propose safeguards against digital arrest scams. The scrutiny could expand platform duties, bank accountability and compensation for cyber fraud victims.At the October 29 hearing, the Supreme Court said financial institutions must be held accountable for digital arrest scams and other cyber fraud. (File photo) The Supreme Court has asked WhatsApp and other online intermediaries to outline the steps they plan to take to prevent digital arrest scams and related cybercrimes, news agency Press Trust of India reported.The court has also directed the platforms to submit their proposals to the Indian Cybercrime Coordination Centre (I4C).

It will consider the matter again on November 23.The directions were issued by a bench headed by Chief Justice of India Surya Kant and comprising Justices Joymalya Bagchi and V Mohana. The order, uploaded on the court's website, relates to an October 29 hearing in a case initiated by the court titled "In Re: Victims of Digital Arrest Related to Forged Documents".Senior advocate Kapil Sibal, appearing for WhatsApp, told the bench that the platform had taken preventive measures, including action against 9,400 accounts.

He said WhatsApp would file an affidavit detailing the steps it had taken and was developing software to identify suspicious accounts and warn users. "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," the bench said in its order, according to PTI.At the October 29 hearing, the Supreme Court said financial institutions must be held accountable for digital arrest scams and other cyber fraud.

It said banks should compensate victims if an investigation finds that a fraud occurred because the institution failed 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 bench said.During the hearing, the Chief Justice questioned why banks could not intervene when customers suddenly tried to transfer unusually large sums that did not match their usual transaction patterns."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 said.To ensure that the RBI's proposed regulatory measures and the court's directions are implemented effectively, the bench directed the central bank to submit a list of all authorised financial institutions at the next hearing.The bench observed that although cybercrimes had fallen by 50 per cent, victims had lost Rs 800 crore so far this year.

It said the RBI's proposed regulatory framework must include enforceable provisions covering compensation, preventive intervention and institutional accountability.The Chief Justice said the bench would first examine the RBI's proposed Know Your Customer Amendment Directions, 2026, before allowing the regulatory process to proceed. The directions are proposed to be notified by November 30 and brought into effect by December 31.Describing banks as a "protective umbrella" for vulnerable customers, the Chief Justice said financial institutions had information about account holders and their transaction histories and should use it to prevent fraud before money left an account.Attorney General R Venkataramani, appearing for the Centre and other authorities, told the bench that substantial work had been done to improve the detection of suspicious transactions and strengthen safeguards in the banking system, PTI reported.The bench also directed law enforcement agencies in all states and Union territories to submit reports on first information reports registered in digital arrest scam cases and the resulting investigations.

The agencies were also asked to suggest measures for preventing, detecting and prosecuting such offences.Directors general of police in all states and Union territories have been asked to ensure compliance. The reports must be submitted to the inter-departmental committee coordinating the government's response, and those filed before the court must also be forwarded to the committee.The court will next review the proposed safeguards from online platforms, the RBI's regulatory measures and reports from law enforcement agencies as it considers steps to prevent digital arrest scams, compensate victims and hold institutions accountable.- Ends