Hyderabad: The Telangana High Court is scrutinizing the role of banks in cyber fraud cases, particularly focusing on the State Bank of India (SBI) Keezhmad branch in Ernakulam, Kerala.
Justice NV Shravan Kumar has ordered the branch manager to submit an explanation within two weeks regarding the adherence to Reserve Bank of India (RBI) norms when permitting a fraudulent entity to open a current account.
Digital arrest fraud scheme
This directive arose during the hearing of a writ petition filed by 80-year-old AV Mohan Rao from Gopanapally, Hyderabad.
Rao fell victim to a digital arrest fraud scheme, where he was coerced into transferring Rs 50 lakh.
The funds were subsequently funneled into an account registered under the name Bharat Enterprises, which was implicated in siphoning off Rs 5 crore from multiple victims across the country in a single day.
Justice Kumar expressed concern over the bank’s apparent inaction and failure to raise any alarms when the money was deposited and then rapidly withdrawn within 24 hours.
He has mandated that the SBI branch manager provide an additional affidavit detailing the compliance with RBI guidelines during the account opening process, emphasizing the need for strict adherence to regulatory protocols. The response is expected by April 5.
On September 10, 2024, Mohan Rao transferred Rs 50 lakh via RTGS from his Punjab National Bank account in Yusufguda, Hyderabad, to the Bharat Enterprises account at SBI Keezhmad.
Cyber police later discovered that the funds were withdrawn almost immediately after their arrival, leaving only Rs 50 lakh in the account, which has since been frozen.
The bank acknowledged receipt of the funds and noted that the large withdrawal of Rs 5 crore had increased the account balance to Rs 5.5 crore before it was depleted.
SBI expresses confusion
However, SBI expressed confusion over multiple court orders instructing the release of funds to various victims, stating that it could not comply due to the diminished balance in the account and unclear directives on which order to prioritize.
