The Telangana High Court is investigating the role of banks, particularly the State Bank of India (SBI) Keezhmad branch in Ernakulam, Kerala, in cyber fraud cases. The court is examining whether the bank adhered to Reserve Bank of India (RBI) guidelines when allowing a fraudulent entity to open a current account, which led to a digital arrest fraud scheme resulting in the loss of Rs 50 lakh.
Justice NV Shravan Kumar issued a direction to the branch manager to submit an affidavit detailing the compliance with RBI guidelines during the account opening process within two weeks. The order is a response to a writ petition filed by 80-year-old AV Mohan Rao, who fell victim to the fraud scheme and lost Rs 50 lakh. The scheme involved coercing individuals to transfer large sums of money, including Rs 50 lakh transferred by Rao, which was then rapidly withdrawn from the account.
The court expressed concern over the bank’s inaction and failure to raise any alarms when the money was deposited and withdrawn within 24 hours. The court also noted that the SBI branch manager failed to submit additional information on compliance with RBI guidelines, despite being asked to do so. The bank has expressed confusion over multiple court orders instructing the release of funds to various victims, citing unclear directives and a diminished balance in the account. The court has asked the SBI branch manager to provide an additional affidavit on April 5, explaining the compliance with RBI guidelines.