Writ petition wants government to frame policy for online banking frauds

A writ petition has been filed before the Supreme Court for the government to come up with a legislative policy to ensure better investigation of online banking frauds. Due to the increasing number of such cases, it wants the government to create a specialized investigation agency to deal with such matters.

The plea, while highlighting that so far no effective law or agency has been formulated by the Government of India to curb online frauds, urged the top Court to use the power of Article 142 to frame the guidelines because common people of the country are very much aggrieved with the menace of online fraud.

The petition has sought directions for constitution of a national level coordinating agency constituting of police of all respective states. Directions have been sought for creation of an agency by the Reserve Bank of India (RBI) to locate the account and the account holder from where the crime is being committed with 24 hours helpline and offices in each district.

Moreover, the petitioner urged the Court to direct the banks to start an OTP service on mobile phones of customers at the GrahakSeva Kendra and direct OLX to verify the IDs of anyone who is registering to transact using their platform. The petitioners, residents of Uttar Pradesh and Delhi who were victims of online fraud, say that they were duped after making online payment for second-hand mobile phones advertised in the e-commerce portal OLX.

They alleged that the concerned police stations refused to register their FIR. The plea stated that in cases of cognizable offences, it is mandatory for the police to register a complaint as an FIR; even if any incident does not fall under the jurisdiction of a particular police station, then it is the duty of the police to register a zero number FIR and transfer the same to the concerned police station for investigation, which has territorial jurisdiction.

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The petitioners pointed out that the problem has also been brought up in literature and films including the recent films Jamtara and The Return of Abhimanyu. They also cited a survey by FIS, a financial services technology provider, and a report by Business Insider India which showed that 18% of Indians suffered from online banking fraud in the past year.

According to RBI’s annual report, bank frauds of Rs 100,000 and above have more than doubled in value to Rs 1.85 lakh crores in FY20 as compared to Rs 71,500 crores in FY19. The number of such cases has increased by 28% in the same period. Malicious actors are duping people over the internet by various means to steal their money or sensitive information.