New MHA SOP eases refunds for cyber fraud cases below ₹50,000: Report

The Ministry of Home Affairs (MHA) has approved a Standard Operating Procedure (SOP) for the National Cybercrime Reporting Portal’s Cyber Financial Crime Reporting and Management System, The Indian Express reported on Thursday.

 

Under the SOP, refunds in small-value fraud cases, where the disputed amount is below ₹50,000, can be processed quickly without requiring a court order. If no court or restoration order exists, banks are required to lift the freeze on such amounts within 90 days, the report said.

Uniform rules for financial intermediaries

According to the report, the SOP lays down a standard process for banks, payment aggregators, non-banking financial companies, e-commerce platforms, stock-trading applications, mutual fund houses and other financial intermediaries once a cybercrime complaint flags a transaction as suspicious.

 

 

“The latest SOP provides a comprehensive grievance redressal mechanism for individuals whose accounts or funds have been unnecessarily frozen following cybercrime alerts. It prescribes a three-tier escalation structure to ensure time-bound resolution of complaints,” a source told The Indian Express.

Rising cyber fraud losses

The data compiled by the Indian Cyber Crime Coordination Centre (I4C), which functions under the MHA, shows that Indians have lost more than ₹52,976 crore to fraud and cheating cases over the past six years.

 

In 2025 alone, losses stood at ₹19,812.96 crore across 2,177,524 cheating-related complaints. This compared with ₹22,849.49 crore lost across 1,918,852 complaints in 2024.

 

Losses were recorded at ₹7,463.2 crore in 2023, ₹2,290.23 crore in 2022, ₹551.65 crore in 2021 and ₹8.56 crore in 2020, according to NCRP data.

High-level panel on ‘digital arrest’ scams

Separately, following directions from the Supreme Court in a suo motu case on so-called “digital arrest” scams, the MHA has constituted a high-level inter-departmental committee to examine the issue in detail, media reports said.

 

According to a Live Law report, the panel works under the chairmanship of the Special Secretary (Internal Security), MHA, and includes senior officials from the Ministries of Electronics and IT, Telecommunications, External Affairs, Law and Justice, Consumer Affairs, the Department of Financial Services, the Reserve Bank of India, the Central Bureau of Investigation, the National Investigation Agency, Delhi Police and the I4C.

 

The chief executive officer of the I4C serves as the Member-Secretary. The committee meets every two weeks, with Attorney General R Venkataramani also attending.

Panel’s mandate and early inputs

The committee has been tasked with reviewing operational challenges faced by enforcement agencies, examining court directions and amicus recommendations, identifying gaps in laws and rules, and proposing corrective measures.

 

As per a status report submitted to the SC, the panel’s first meeting took place on December 29. During the meeting, the CBI suggested introducing a monetary threshold, with higher-value cases handled by the CBI and lower-value cases managed by State or Union Territory agencies with support from the MHA.

 

The RBI informed the court that it had issued advisories to banks on using artificial intelligence-based tools for fraud detection and was at an advanced stage of finalising an SOP for freezing accounts linked to suspicious transactions.

Regulatory gaps and victim compensation

The Ministry of Electronics and IT flagged the need to strengthen adjudication under Section 46 of the Information Technology Act, 2000, while the Department of Telecommunications said draft rules under the Telecommunications Act, 2023, were undergoing stakeholder consultations to address issues such as negligent SIM card issuance and multiple connections.

 

The committee also discussed victim compensation, agreeing that accountability must be fixed where losses result from negligence or service deficiencies by banks, telecom providers or other regulated entities.

 

It observed that victims should not suffer due to systemic failures and that compensation mechanisms must function without prejudice to other legal remedies. The committee chair directed the RBI, DoT and MeitY to review existing systems and suggest improvements.

 

The MHA has sought at least a month’s time from the Supreme Court to allow the panel to deliberate further and submit inputs. The matter is next scheduled for hearing on January 20.