- The Supreme Court called for mandatory compensation to digital fraud and 'digital arrest' victims where banks fail to exercise due diligence. - The ruling emphasizes institutional accountability of financial establishments in tracking, freezing, and recovering siphoned funds. - Highlights the growing menace of sophisticated cybercrimes, financial frauds, and systemic loopholes in digital banking security. - Strengthens consumer protection rights within India's expanding digital economy framework. - **Digital Arrest:** A sophisticated cyber-fraud tactic where scammers impersonate law enforcement officials via video call, falsely accusing victims of criminal involvement and forcing them into virtual house arrest while siphoning their money. - **Due Diligence in Banking:** The legal and institutional obligation of banks and financial institutions to exercise reasonable care, monitor suspicious transactions, and adhere to strict KYC norms to prevent fraud. - **Supreme Court:** An apex judicial body in India that interprets constitutional law, protects fundamental rights, and issues binding directives to executive and financial institutions to ensure citizen protection. **Introduction** The Supreme Court has emphasized that banks and financial institutions must provide mandatory compensation to victims of digital frauds and 'digital arrest' scams if there is a lack of due diligence on their part. The stance underscores institutional responsibility in tackling cybercrimes and protecting consumer assets in digital transactions. **Core Issue and Detailed Points** - The Supreme Court called for mandatory compensation to digital fraud and 'digital arrest' victims where banks fail to exercise due diligence. - The ruling emphasizes institutional accountability of financial establishments in tracking, freezing, and recovering siphoned funds. - Highlights the growing menace of sophisticated cybercrimes, financial frauds, and systemic loopholes in digital banking security. - Strengthens consumer protection rights within India's expanding digital economy framework. **Key Statutory Bodies, Acts & Concepts** - **Digital Arrest:** A sophisticated cyber-fraud tactic where scammers impersonate law enforcement officials via video call, falsely accusing victims of criminal involvement and forcing them into virtual house arrest while siphoning their money. - **Due Diligence in Banking:** The legal and institutional obligation of banks and financial institutions to exercise reasonable care, monitor suspicious transactions, and adhere to strict KYC norms to prevent fraud. - **Supreme Court:** An apex judicial body in India that interprets constitutional law, protects fundamental rights, and issues binding directives to executive and financial institutions to ensure citizen protection.