The bench, also comprising Justices Joymalya Bagchi and V Mohana, has listed the plea for further consideration on November 23.
These may include temporarily suspending unusual or suspicious transactions inconsistent with the account’s past transaction history, automatically intimating such transactions to the nearest police station, and subsequently physically verifying the reported transactions to ascertain their genuineness,” the order said. “We have also emphasised in the past various preventive safeguards that must be mandated for every financial institution. In order to ensure effective implementation of the regulatory measures proposed by the RBI, as well as the directions issued, the bench further directed the RBI to submit a list of all authorised financial institutions before this court on the next date of hearing. The reports must be submitted to the inter-departmental committee coordinating the government’s response, with reports furnished to the court also being forwarded to the committee, the bench directed.
During the hearing, the CJI had questioned why banks could not intervene when customers suddenly attempted to transfer unusually large sums of money that were inconsistent with their established transaction patterns. The top court, on October 29, had said financial institutions must be held accountable for digital arrest scams and other cyber frauds, emphasising that banks should be required to compensate victims for losses suffered where an investigation establishes that the fraud occurred due to the institution’s failure to exercise due diligence.
