Govt Moves to Tighten SIM Rules to Prevent ‘Digital Arrests’, Tells Supreme Court

New Delhi: In a move aimed at preventing cases of “digital arrest,” the Ministry of Home Affairs (MHA) has informed the Supreme Court that banks and telecom companies should be held accountable if their negligence causes financial or other losses to citizens. The statement came during a report filed before the top court by an internal high-level committee set up by the MHA under the Supreme Court’s direction.

The committee, headed by the Special Secretary (Internal Security) of the MHA, recommended tightening rules for obtaining SIM cards and suggested that cases above a certain threshold should be investigated by the CBI. The committee also considered the implementation of compensatory mechanisms for victims, ensuring that individuals are not penalized due to system failures or other lapses.

Compensation and Monitoring Mechanism
The committee reviewed amicus curiae recommendations on victim compensation and was instructed to propose improvements to the existing framework. The MHA has requested one month from the Supreme Court to further deliberate and submit additional suggestions. The next hearing is scheduled for January 20.

CBI to Handle High-Value Cases
According to the report, the committee meets bi-weekly, with Attorney General R. Venkataramani attending. In its first meeting on December 29, the CBI recommended setting a monetary threshold for digital arrest cases: cases above this limit would be investigated by the CBI, while those below it could be handled by state agencies with MHA support.

Crackdown on SIM Card Fraud
The meeting also discussed measures to curb SIM card fraud. The Reserve Bank of India (RBI) has issued guidance on the use of AI-based tools to detect fraudulent transactions, and a standard operating procedure (SOP) is being finalized to freeze suspicious accounts. Under the draft rules of the Telecommunications Act, 2023, upcoming regulations will address negligence in SIM issuance, multiple SIMs issued to a single individual, and related concerns.

The Indian Cyber Crime Coordination Centre is also reviewing SOPs for freezing and unfreezing accounts, recovering funds, and reimbursing victims. Plans are underway to restructure the National Cyber Crime Reporting Portal and the 1930 helpline to improve grievance redressal.