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In rare relief to a victim of a digital arrest scam, the Reserve Bank of India, through its Integrated Ombudsman Scheme, has asked five “beneficiary” banks, where mule accounts were opened last year to transfer siphoned funds, to pay the victim between 5% and 7.5% of the deposited sums.
The five banks are Axis Bank, City Union Bank, ICICI bank, IndusInd Bank and Yes Bank. A speaking order passed on February 25 by the RBI ombudsman in New Delhi asked these banks to collectively pay Rs 1.31 crore to the victim.
The order for penalties marks a major development in what is described as Delhi’s biggest digital arrest case in which 78-year-old Naresh Malhotra, a retired banker, lost Rs 22.92 crore to digital arrest frauds between August and September 2025. Towards the end of March this year, the case was transferred to the CBI.
Malhotra, who has also filed a criminal writ petition before the Supreme Court, told The Indian Express that he has already received the Rs 1.31 crore in the four “remitter” bank accounts from where the funds moved. He has recently filed an appeal with the RBI, demanding the full amount along with interest and damages.
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“In a landmark decision, five major banks have been ordered to compensate a cyber-fraud victim with ₹1.3 crore after a massive ₹22.9 crore ‘digital arrest’ scam. The authorities held the banks liable for failing to implement proper security protocols and failing to flag suspicious high-value transactions. This case marks a significant shift in accountability, forcing financial institutions to step up their cybersecurity measures.”
