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10 Feb 2026·Source: The Indian Express
3 min
EconomyPolity & GovernanceNEWS

Supreme Court Denounces Massive Digital Arrests as 'Dacoity' of Public Money

SC criticizes digital arrests involving ₹54,000 crore, labeling it 'dacoity' of public money.

The Supreme Court has expressed strong disapproval of digital arrests involving a staggering ₹54,000 crore, characterizing the activity as "dacoity." The court's remarks highlight the severity of the issue and the significant loss of public money involved. The Supreme Court's observation underscores the gravity of the situation, emphasizing the need for stringent measures to prevent such fraudulent activities and safeguard public funds. The court's strong stance reflects its commitment to upholding financial integrity and protecting citizens from economic exploitation.

UPSC Exam Angles

1.

GS Paper 3 (Economy): Financial regulations, cyber security, money laundering

2.

Connects to syllabus topics like banking, financial markets, and government policies

3.

Potential question types: Statement-based, analytical, current affairs linked to static concepts

Visual Insights

Key Statistics from Supreme Court's Observation on Digital Arrests

Highlights the massive amount of public money involved in digital arrests, as observed by the Supreme Court.

Amount Involved in Digital Arrests
₹54,000 crore

The Supreme Court has characterized this as 'dacoity' of public money, emphasizing the severity of the issue.

More Information

Background

The issue of digital arrests and financial irregularities highlights the importance of a robust regulatory framework in the financial sector. Historically, India has faced challenges in preventing and addressing financial scams. The establishment of institutions like the Reserve Bank of India (RBI) and the enactment of laws such as the Banking Regulation Act were crucial steps in regulating the banking sector and preventing financial malpractices. Over time, the nature of financial crimes has evolved with technological advancements. The rise of digital transactions has created new avenues for fraud and money laundering. This necessitates continuous adaptation of regulatory mechanisms and strengthening of law enforcement agencies. The Prevention of Money Laundering Act (PMLA) is an important legislation aimed at combating money laundering, but its effectiveness depends on rigorous enforcement and timely amendments to address emerging challenges. The judiciary plays a crucial role in upholding financial integrity and protecting public funds. The Supreme Court's intervention in cases of financial irregularities underscores its commitment to ensuring accountability and transparency. The court's power of judicial review allows it to examine the legality and constitutionality of government actions and policies, thereby safeguarding the interests of citizens and the economy.

Latest Developments

In recent years, the government has taken several steps to promote digital transactions and financial inclusion. Initiatives like Digital India and Jan Dhan Yojana have aimed to bring more people into the formal banking system. However, the increased use of digital platforms has also led to a rise in cybercrimes and financial frauds, necessitating enhanced cybersecurity measures and awareness campaigns. The Reserve Bank of India (RBI) has been actively involved in regulating the fintech sector and promoting innovation while ensuring financial stability. The introduction of regulatory sandboxes allows fintech companies to test new products and services in a controlled environment. The RBI's efforts to strengthen cybersecurity and data protection are crucial in safeguarding the interests of consumers and preventing financial frauds. Looking ahead, the focus will be on strengthening regulatory frameworks, enhancing cybersecurity measures, and promoting financial literacy. The government and regulatory authorities need to work together to create a safe and secure digital financial ecosystem. The use of technologies like artificial intelligence and machine learning can help in detecting and preventing financial frauds.

Practice Questions (MCQs)

1. Consider the following statements regarding the Prevention of Money Laundering Act (PMLA), 2002: 1. It provides for the confiscation of property derived from, or involved in, money laundering. 2. The Enforcement Directorate (ED) is responsible for investigating offenses under the PMLA. 3. The Act does not apply to offenses related to digital assets or cryptocurrencies. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is CORRECT: The PMLA indeed provides for the confiscation of property derived from money laundering. Statement 2 is CORRECT: The Enforcement Directorate (ED) is the primary agency responsible for investigating offenses under the PMLA. Statement 3 is INCORRECT: The PMLA has been amended to include offenses related to digital assets and cryptocurrencies, bringing them under its purview. Therefore, the Act DOES apply to offenses related to digital assets.

2. Which of the following is NOT a function of the Reserve Bank of India (RBI)?

  • A.Issuing currency notes
  • B.Acting as the banker to the government
  • C.Regulating the stock market
  • D.Managing the country's foreign exchange reserves
Show Answer

Answer: C

Options A, B, and D are all functions of the RBI. The RBI is responsible for issuing currency notes, acting as the banker to the government, and managing the country's foreign exchange reserves. However, regulating the stock market is the responsibility of the Securities and Exchange Board of India (SEBI), not the RBI.

3. In the context of digital financial security, what does 'phishing' typically refer to?

  • A.A type of secure encryption protocol
  • B.A fraudulent attempt to obtain sensitive information
  • C.A method for tracking online transactions
  • D.A government initiative to promote digital literacy
Show Answer

Answer: B

Phishing is a type of cybercrime where individuals or groups attempt to deceive users into providing sensitive information such as usernames, passwords, and credit card details by disguising themselves as trustworthy entities in electronic communications. It is a fraudulent attempt to obtain sensitive information.

Source Articles

Rs 54,000 cr lost in digital arrests, this is dacoity: Supreme Court | Legal News - The Indian Express

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PM Modi cautions against ‘digital arrest’ scams: What they are, how to stay safe | Explained News - The Indian Express

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Digital arrest scam: Even as MHA, RBI act to curb cyber fraud, citizens lose over Rs 2,500 crore in 2 years | Business News - The Indian Express

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