Chief Justice Surya Kant, along with Justices Joymalya Bagchi and V Mohana, issued a 12‑point directive on Thursday, mandating that banks indemnify victims who suffer losses from digital fraud when investigations confirm a due‑diligence lapse.
The bench cited a 50 per cent drop in cyber‑crimes this year, yet the financial services sector still grapples with ₹800 crore in fraud payouts, underscoring the gap between preventive measures and actual protection.
The directive will be applied to the RBI’s upcoming Know‑Your‑Customer Amendment Directions, 2026, which RBI plans to notify by November 30 and enforce from December 31.
Surya Kant cited the case of 68‑year‑old retired teacher Ramesh Kumar from South Delhi who lost ₹12 lakh in a fake transfer, illustrating how banks’ lax checks allow such losses. Banks must halt any transaction that deviates from an account holder’s historical pattern, log suspicious activity, and, where necessary, physically verify the source of the funds.
Chief Justice Surya Kant also urged banks to classify accounts by risk tiers and deploy artificial intelligence to flag anomalies, while mandating that the nearest police station be auto‑notified of high‑value transfers that could signal coercion.
Attorney General R. Venkataramani noted that the government has bolstered detection systems, but the bench remains skeptical about the strength of accountability clauses, prompting the RBI to revise its framework before the December deadline.