SC tells RBI to bring in stricter checks to stop online frauds, Pg12

Key Highlights:

• The Supreme Court directed the RBI to implement stricter measures to prevent online frauds, which resulted in over ₹52,000 crore being siphoned off between April 2021 and November 2025.
• The court highlighted the need for stronger notifications for suspicious transactions, citing an example of large withdrawals from retiree accounts.
• The court directed the Home Ministry to implement the Standard Operating Procedure issued on January 2 for inter-agency coordination in cyber fraud cases.
• The government is finalizing an MoU for sharing suspect registry data and mule account detection tools to block fraudulent transactions.

Detailed Insights:

• The Supreme Court expressed concern over the large-scale misappropriation of funds through online fraud, terming it as "absolute robbery or dacoity".
• The court emphasized the RBI's responsibility to protect the public's money held in trust by banks and called for an expansion of the definition of 'suspicious transaction'.
• The court observed that banks are primarily in "business mode," facilitating swifter money transfers, which also aids the movement of stolen money.
• The Standard Operating Procedure aims to ensure effective coordination among agencies to identify the location of defrauded parties and combat cyber-enabled frauds.
• The government's MoU focuses on preventive and responsive measures, including sharing suspect registry data and mule account detection tools, to block fraudulent transactions.

Key Concepts Involved:

• RBI (Reserve Bank of India): India's central bank responsible for regulating the banking system and monetary policy.
• Standard Operating Procedure (SOP): A set of step-by-step instructions compiled by an organization to help workers carry out complex routine operations.
• Mule Account: An account used to transfer and hide illegally obtained money on behalf of someone else.