In a surprising order issued while hearing a case related to digital arrests, the Rajasthan High Court directed numerous state entities, including financial institutions such as banks, e-commerce platforms, and gig workers, to implement significant reforms. Among other directives, the court ordered the state’s e-commerce platforms to ensure a minimum of 15% female representation in their cab-driver workforce and mandated QR-enabled ID cards for all gig workers.
Citing inefficiencies within the Ministry of Home Affairs’ (MHA) Indian Cyber Crime Coordination Centre (I4C) and the Financial Intelligence Unit (FIU), the court also recommended establishing a state-specific Regional Cyber Crime Coordination Centre (R4C) to work in coordination with the I4C.
The court ruled that the “present machinery/system in the State under DG State Crime Records Bureau & Cyber (SCRB) is not equipped to handle not only traditional cybercrimes but also the upcoming challenges of artificial intelligence, deepfakes and other such technological threats.”
What are the Case Details?
The Jodhpur bench of the Rajasthan High Court made these observations while hearing the bail applications of Vikram Goswami and Priya Agarwal, who allegedly impersonated sub-inspectors to extort money from an elderly couple. The accused reportedly “digitally arrested” victims who were over 84 years old. The court emphasised in bold that “digital arrest is not defined in any Act.”
Digital arrest refers to an extortion scam where fraudsters impersonate law enforcement officials to intimidate victims. Recently, the Supreme Court of India directed the CBI to conduct a nationwide investigation into the rising number of digital-arrest cases.
“Furthermore, cases of digital arrest, committed by misuse of Information Technology, are growing at a fast pace, and modus operandi in all cases is almost same,” noted Judge Ravi Chirania, who also suggested that the offence may attract punishment of up to seven years’ imprisonment.
Referring to the rapid growth in cybercrimes affecting individuals, law and order, and sectors such as education and banking, the judge posed a critical question: “How to handle this new, unstoppable and exponentially growing problem?”
Problems the Indian Banking System is Facing
To assess these concerns, the court consulted with Advocate Nisheeth Dixit, ADG Sachin Mittal, and Jodhpur Commissioner of Police Om Prakash, and directed the RBI and banks to take “all necessary steps to detect and control cybercrimes.”
The court highlighted the following issues currently plaguing the banking system:
- Mule accounts and mule money
- Misuse of internet banking by small account holders with low or no digital literacy
- Bulk posting or transfer of fraud funds into multiple accounts
- Unauthorised ATM use involving mule accounts
- Rapid conversion of cyber-fraud proceeds into digital assets like…
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