SC Asks RBI To Frame SOP For Handling Mule Accounts, Orders States To Speed Up Cyber Victim Relief

New Delhi: The Supreme Court on Tuesday directed the Reserve Bank of India (RBI) to frame and circulate a standard operating procedure (SOP) for handling bank accounts linked to cyber frauds, including mule accounts.

Issuing a slew of directions to bolster the fight against cyber‑enabled financial crimes, a bench led by Chief Justice Surya Kant and comprising Justices Joymalya Bagchi and V Mohana asked all states, Union Territories and law enforcement agencies to swiftly adopt and operationalise grievance‑redressal and money‑restoration modules designed for victims. The apex court was hearing a suo moto matter in connection with digital arrest scams.

The bench was informed that digital arrest complaints received on the cybercrime reporting portal sharply declined from 1,23,672 in 2024 to 58,239 in 2025, and stood at 16,377 for the period ending on June 30, 2026. The bench observed that while this trend regarding the decline in complaints is certainly encouraging, continued monitoring remains indispensable.

The bench passed the directions after considering a status report filed by the Indian Cyber Crime Coordination Centre (I4C) of the Union Ministry of Home Affairs.

The report detailed steps taken by various ministries, regulators, investigating agencies, banks and intermediaries pursuant to the court's earlier interim orders in December, 2025 and February, 2026.

The bench also noted that the CBI registered ten digital arrest cases and several connected matters. The bench said that in one investigation alone, the CBI identified 238 victims, tracked 67 first-layer bank accounts, uncovered transactions worth about Rs 80 crore and conducted searches at 93 locations across 16 states.

The bench observed that the Inter-Departmental Committee suggested the CBI should consider lowering the existing Rs 10-crore threshold for taking over digital arrest cases and aggregating cases involving the same organised network to meet that threshold.

The bench directed the RBI to prepare and circulate, within four weeks, an SOP for dealing with mule accounts and accounts linked to money laundering and cyber-enabled fraud. The bench said the SOP should be furnished to the registrar general of every high court.

The bench directed all states, union territories and law enforcement agencies to expeditiously operationalise -- the grievance redressal module, and the money restoration module.

These mechanisms were introduced under the MHA's January 2 SOP governing the National Cyber Crime Reporting Portal and Cyber RMS.

The bench directed states to emphasize creating public awareness about digital arrest scams and the mechanisms in place to report and tackle them.

The bench asked registrar generals of all HCs to inform courts and adjudicating authorities dealing with bank account freezing in cyber fraud cases about these grievance mechanisms. The bench said the aggrieved persons should be encouraged to use them before pursuing other legal remedies, without affecting their statutory or constitutional rights.

The bench also directed that states yet to notify State Cyber Crime Coordination Centres should do so within four weeks and adopt the e-Zero FIR mechanism in consultation with the Indian Cyber Crime Coordination Centre.

The bench also asked authorities to ensure the expeditious disposal of bank account freezing cases arising out of cyber-enabled financial fraud.

The bench has scheduled the matter for further hearing on September 16 when a fresh consolidated status report is to be filed.

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