New Delhi: Amid growing concern over the low recovery of money lost to online financial fraud, the Union Ministry of Home Affairs (MHA) has tightened procedures governing the freezing of bank accounts in cyber crime cases. Law enforcement agencies have now been directed to strictly verify the authenticity of complaints before ordering any account freeze, following reports that innocent individuals and businesses are being caught in the cybercrime control framework due to errors or inadequate verification.
The move comes after repeated complaints that mistaken identity, disputed transactions, or incorrectly flagged activities have led to prolonged bank account freezes, causing severe financial disruption to legitimate account holders. Officials said the revised approach aims to strike a balance between swift action against cyber crime and safeguards to protect citizens from undue hardship.
Revised SOPs to Reduce Collateral Damage
The directive is part of revised Standard Operating Procedures (SOPs) issued for handling online fraud complaints reported through the National Cybercrime Reporting Portal (NCRP) and the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS). According to officials, the updated SOPs are designed to ensure that only genuine and verified complaints are escalated within the financial fraud response ecosystem.
Government data highlights the challenge facing cyber crime enforcement. Between April 2021 and November 2025, authorities managed to block ₹7,647 crore from reaching fraudsters’ accounts through early intervention. However, during the same period, only ₹167 crore was actually restored to victims, even as the total amount reported stolen through online financial frauds surged to ₹52,969 crore.
While early action has helped prevent large sums from being credited to criminal networks, officials acknowledged that actual recovery remains disproportionately low, underscoring the need for more precise and accountable enforcement.
Innocent Account Holders Affected
Officials said unverified or erroneous complaints have often resulted in bank accounts being frozen without a clear link to cyber crime. In several cases, salary accounts, business current accounts, and savings accounts were frozen for extended periods, affecting livelihoods and daily operations.
Government sources noted instances where individuals were unable to withdraw salaries, make essential payments, or run businesses due to blanket account freezes triggered by disputed or incorrectly flagged transactions. These disruptions, officials said, have highlighted the need for greater scrutiny before coercive financial action is taken.
Proportionate Action and Accountability
Under the new framework, enforcement agencies have been advised to apply measures in a proportionate and calibrated manner. Instead of indiscriminate freezes, authorities may place specific funds on hold, suspend digital banking access, or initiate seizure-related actions based on verified links to fraud.
Clear accountability has been emphasised at every stage of the cyber crime response process to prevent arbitrary or excessive action. A senior official said that while speed is crucial in cybercrime cases—where funds can be moved across multiple accounts within minutes—indiscriminate freezes undermine public trust.
“The objective is to stop fraud proceeds swiftly without paralysing legitimate financial activity,” the official said.
Technology Integration to Strengthen Cyber Crime Response
To improve real-time intervention, banks will be encouraged to integrate their application programming interfaces (APIs) with the NCRP. Officials said this integration is expected to enable faster “put-on-hold” actions on suspected fraud proceeds and significantly improve coordination among police, banks, payment service providers, merchants, and other financial intermediaries.
The government believes that tighter technological integration and faster communication will help ring-fence suspicious funds at an early stage, reducing delays that currently allow money to be layered and laundered across multiple accounts, complicating recovery efforts.
A More Precise and Fair Cyber Crime Framework
Officials stressed that the revised SOPs are not intended to dilute enforcement against cyber crime but to make the system more accurate and fair. By ensuring stricter verification before bank accounts are frozen, authorities hope to focus resources on genuine fraud networks while minimising collateral damage to ordinary citizens.
The MHA has also reiterated the importance of prompt reporting of cyber frauds through the NCRP, noting that early reporting remains critical to improving recovery chances. At the same time, the ministry has underlined that verification must precede financial coercion, signalling a shift toward a more calibrated, accountable, and citizen-sensitive cyber crime response mechanism.
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