NEW DELHI: Amid concerns over meagre recoveries in online financial fraud cases despite the freezing of bank accounts involving over Rs 7,500 crore, the government has directed law enforcement agencies to verify the authenticity of complaints before ordering such freezes.
According to officials, the move aims to prevent unnecessary hardship to innocent account holders while continuing efforts to curb cyber-enabled financial crimes, officials said.
The Union Ministry of Home Affairs (MHA) has issued these directions as part of revised Standard Operating Procedures (SOPs) for addressing grievances related to online fraud through the National Cybercrime Reporting Portal (NCRP) and the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS).
The officials said agencies have been specifically instructed to ensure that only genuine complaints are escalated within the system, so as to avoid unwarranted account freezes that often disrupt normal financial activities.
According to government data, while Rs 7,647 crore was blocked from reaching fraudsters’ accounts between April 2021 and November 2025, only Rs 167 crore has been restored to victims. This recovery comes against a staggering Rs 52,969 crore reported stolen during the same period through online financial frauds. Officials acknowledged that although the system has been effective in preventing large sums from being credited to criminal accounts, the actual recovery of funds remains limited.
The revised SOPs are intended to strike a balance between rapid intervention in cybercrime cases and safeguards for ordinary citizens. A senior official noted that while swift action is essential to prevent money from being siphoned off, indiscriminate freezing of accounts based on unverified or erroneous complaints can cause serious difficulties for legitimate customers.
The government has expressed concern that individuals and businesses are sometimes caught up in the cybercrime control framework due to mistaken identity, disputed transactions, or insufficient verification. Such actions can disrupt daily life, delay salary withdrawals, interrupt business operations, and block essential payments when bank accounts are frozen without a clear and established link to a fraud network.
To address this, the SOPs place greater emphasis on stricter scrutiny before complaints are routed into the financial fraud response ecosystem. Measures such as placing funds on hold, suspending digital banking services, or initiating seizure-related actions are to be applied proportionately, with clear accountability at every stage.
As part of efforts to strengthen real-time responses to cyber-enabled financial fraud, banks will be encouraged to integrate their application programming interfaces (APIs) with the NCRP. This integration is expected to enable faster “put-on-hold” actions on suspected fraud proceeds and improve coordination among police, banks, payment operators, merchants, and other financial intermediaries.
The government believes that tighter and faster communication across stakeholders will help ring-fence suspicious funds at an early stage, reducing delays that often allow money to be transferred across multiple accounts within minutes, thereby complicating recovery efforts.