Government Plans ‘Super Feature’ to Protect Citizens from Digital Arrest Scams

In a decisive move to curb the rising menace of cyber fraud—particularly cases of so-called “digital arrest”—the Central Government has stepped up efforts to safeguard citizens. The Union Ministry of Home Affairs (MHA) has constituted a high-level committee to design strong preventive mechanisms, including an emergency feature that could allow users to instantly freeze their online financial transactions.

According to official sources, the committee comprises senior officials from key agencies and ministries, including the National Investigation Agency (NIA), Delhi Police, Reserve Bank of India (RBI), Indian Cyber Crime Coordination Centre (I4C), and the Ministries of IT and Telecommunications. The panel is chaired by the Special Secretary (Internal Security), MHA.

Instant Freeze on Financial Transactions

One of the most significant proposals under consideration is the introduction of an “emergency button” within banking platforms and UPI-based payment applications. If a user suspects that they are being targeted by cybercriminals, they would be able to immediately block all financial transactions linked to their bank accounts.

This instant freeze mechanism is aimed at preventing hard-earned money from being siphoned off by fraudsters, especially in high-pressure scams like digital arrest, where victims are coerced into transferring funds under the threat of fake legal action.

Strengthening Risk Management and Insurance Cover

Beyond preventive tools, the committee is also examining the feasibility of an insurance mechanism to cover losses arising from cyber fraud. With digital crimes becoming increasingly complex, banks are being encouraged to strengthen their risk-management frameworks.

Experts are exploring whether fraudulent transactions can be detected and halted at an early stage—particularly to stop stolen funds from being rapidly transferred across multiple “mule accounts” used by cybercrime networks.

Proposal for a National Fraud Insurance Pool

Sources indicate that specialists are advocating for the creation of a centralized “insurance pool” to distribute cyber fraud risks across the entire financial system. This model would be similar to terrorism insurance pools already in use in several countries, ensuring collective protection rather than isolated liability.

The government’s multi-pronged strategy—combining technology, regulation, and insurance—signals a strong commitment to tackling cyber fraud and restoring public confidence in digital financial systems.