Supreme Court takes a strict stance on online fraud; seeks responses from companies including WhatsApp..

The Supreme Court has taken a strict stance on the rising number of cases involving "digital arrests" and online fraud. The Court has questioned WhatsApp and other digital platforms about the measures they are taking to curb cybercrime. Furthermore, it has directed these companies to share their action plans with the Indian Cyber ​​Crime Coordination Centre (I4C).

The Supreme Court has also emphasized that in cases of cyber fraud, the responsibility does not lie solely with the perpetrators or the digital platforms; banks must also be held accountable. If a customer falls victim to fraud due to a bank's negligence, the bank could be held liable to compensate the victim for their losses.

**Action taken by WhatsApp**
A three-judge bench, presided over by the Chief Justice of India (CJI) [Note: The text mentions CJI Surya Kant; however, the current CJI is Sanjiv Khanna—the reference here follows the provided source text], was hearing the matter concerning "digital arrests." The Court took *suo motu* cognizance of the issue. During the proceedings, Kapil Sibal, appearing for WhatsApp, stated that the company has already taken action against approximately 9,400 accounts. Additionally, a specialized software is being developed to identify suspicious accounts and provide timely warnings to users. In response, the Supreme Court directed WhatsApp and other relevant digital platforms to present their plans to the I4C, facilitating a collaborative effort to combat cybercrime.

**Will there be compensation if fraud occurs due to a bank's error?**
During the hearing, the Supreme Court also raised questions regarding the accountability of banks. The Chief Justice asked why banks do not take immediate action when a customer suddenly initiates a transfer of a significantly large sum, inconsistent with their past transaction history. The Court suggested that banks should have the capability to temporarily halt such suspicious transactions and immediately notify the cyber police. The Court further stated that there must be a mechanism to compensate victims if cyber fraud occurs as a result of negligence on the part of the banks.

Provision for compensation in new RBI regulations
The Supreme Court has also taken note of the Reserve Bank of India’s (RBI) proposed KYC amendment directives for 2026. The Court has suggested that these regulations should include provisions for compensating victims of 'digital arrests' and cyber fraud. The proposed regulations are planned to be notified by November 30, 2026, and implemented by December 31, 2026. Additionally, the Court has requested the RBI to provide a list of all authorized financial institutions by the next hearing.

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