INDIA Trends and Developments Contributed by: Nishant Joshi, Kunal Singh, Palash Bhatkoti and Vikalp Wange, Shardul Amarchand Mangaldas & Co.
• the Reserve Bank of India, MHA and Department of Revenue have been directed to consider the desir - ability of suspending suspicious transactions and facilitating the reporting of cases under the PMLA. The Honourable High Court of Calcutta, after consid - ering the increase in instances of such crimes, has recently issued a notification directing the jurisdiction - al magistrates to deal with and decide cases relating to the return of money to victims of such frauds, where such money has been blocked by the Cyber Crime Cell pursuant to an online complaint received by the NCRP, without insisting on registration of an FIR. The Honourable High Court of Kerala has, while rec - ognising that banks are the only entities that can eas - ily monitor and prevent fraudulent transactions and money mules used in such crimes, laid down certain guidelines for freezing the accounts when banks have suspicions about the operation thereof. The primary guidelines are as follows. • If a bank has reason to believe there are suspicious transactions in an account, it is free to effect a debit freeze without notice to the account holder. • The bank has to notify the account holder of such freezing by sending a communication giving the reasons for suspicion, by way of SMS and regis - tered post, on the date of the freezing. • The bank is also required to send a communica - tion detailing the freezing of the account, with the reasons for suspicion, to the jurisdictional Cyber Crime Police Authority and all other relevant authorities. • The account holder is entitled to submit an explanation to the bank regarding the suspicion, and on receipt of such explanation, the bank is required to consider the same and pass appropri - ate orders within a period of one week from the date of receipt – and communicate the same to the account holder. If the bank is satisfied with the explanation submitted by the account holder, the bank is required to de-freeze the account. • If no explanation is received from the account hold - er, or the explanation submitted is not satisfactory to the bank, the latter can continue to freeze the
account for a period of three months from the date of delivery of the communication of the freezing to the authorities. • In the event the bank receives an instruction/order from any authority regarding the frozen account, it is required to comply with such direction and communicate the same to the account holder. However, if no communication is received within a period of three months from the date of delivery of the communication regarding the freezing to the authorities, the bank is required to lift the freezing and allow the account holder to operate or close the account. The above measures demonstrate a clear willingness on the part of the courts to step in and issue direc - tions, wherever required, in order to safeguard victims and put in place the necessary framework for dealing with new types of financial crimes. Conclusion The landscape of financial crime in India has under - gone a fundamental transformation, driven by the rapid convergence of technology and an increasingly digitised financial infrastructure. As this chapter has attempted to demonstrate, the threat is no longer confined to conventional fraud but encompasses sophisticated, technology-enabled schemes that exploit both systemic vulnerabilities and human psychology on an unprecedented scale. India’s response, spanning the deployment of real- time digital countermeasures, the modernisation of substantive and procedural criminal law, and the strengthening of anti-money laundering enforcement, reflects a deliberate and multifaceted effort to confront these evolving challenges.
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