Parneet Sachdev
On a warm March evening in Gandhinagar, a senior doctor sat rigid before her phone screen. On the other end of a video call, men in crisp uniforms and a set that looked like a police control room accused her of helping launder drug money. They spoke of arrest, news cameras, and the ruin of a hard-earned reputation. For over three months, they kept her under what they chillingly called “digital arrest”: she had to remain available on video, seek permission to speak to anyone, and follow every instruction. Terrified, she broke fixed deposits, took fresh loans, and transferred more than Rs 19 crore before the calls finally stopped and she realised she had been conned.
An 83-year-old woman in south Mumbai was held under “digital arrest” for nearly a month and cheated of Rs 7.7 crore(TOI).A Pune homemaker lost Rs 2.5 crore after being forced to remain on camera for weeks(Indian Express).
These are not aberrations. In Noida, Kolkata, Ahmedabad, Mumbai, Eluru and dozens of smaller towns, similar scripts now unfold almost daily.
The Ministry of Home Affairs (MHA) told Parliament this year that “digi-arrest” scams have robbed citizens—mostly the elderly—of roughly Rs 3,000 crore so far.Cybercrime cases rose 31 per cent in 2023 to 86,420, with fraud accounting for nearly 69 per cent of them.
The greatest irony in all this. There is, no provision in India’s statutes to “digitally arrest” anyone.
HOW IS THE GOVERNMENT FIGHTING THIS CRIME
The obvious question, once the calls stop and the money is gone, is whether anything can be salvaged. The answer, at present, is a harsh “sometimes”.
India has a ‘1930’ national cyber-crime helpline. This and the National Cybercrime Reporting Portal (NCRP) now connect more than 85 banks, payment intermediaries and wallets to a back-end system that can attempt to freeze suspicious transactions in real time(Cyber Crime Punjab Police).
A state-of-the-art Cyber Fraud Mitigation Centre (CFMC) set up under the Indian Cyber Crime Coordination Centre (I4C) hosts representatives from major banks, payment aggregators, telecom companies and state police units to coordinate rapid response.
By the end of 2024, banks and law-enforcement agencies had reportedly frozen 8.67 lakh mule accounts, 7 lakh SIMs and 1.4 lakh devices linked to cyber-fraud networks, while blocking more than 6.1 lakh fraudulent transactions worth about Rs 1,800 crore.Officials say that since 2021, some Rs 3,850 crore in fraudulent flows have been intercepted mid-stream.
But the successes sit alongside terrible failures. The Gandhinagar doctor’s money travelled through over 30 bank accounts before much of it vanished abroad. Only a fraction has been traced so far.Maharashtra’s now-infamous Rs 58-crore digital-arrest case involved at least 6,500 mule accounts spread across 13 layers.
SCADEMIC AND THE MODUS OPERANDI
This widespread Scam, referred to as a Scademic has struck at the very roots of digital India.
A phone call arrives. The caller claims that a parcel in the victim’s name containing narcotics, fake passports or large cash has been seized, or that their Aadhaar and PAN have been used in a major money-laundering racket.Within minutes, the call is escalated to supposed officers of the Mumbai Police, CBI, NCB or Enforcement Directorate on Skype or WhatsApp video. Before you realise, you are psychologically imprisoned.Victims are shown forged warrants, “digital arrest orders” and screenshots of bank accounts and passports to make the threat feel real. Some are even forced to strip on camera for fake “body searches”, with footage later used as leverage.
MHA has warned, these criminals often work out of studios painstakingly designed to resemble police stations or government offices, complete with insignia, flags and fake ID cards(PIB).
Victims are asked to liquidate fixed deposits, redeem mutual funds, sell gold, or even dispose of property and wire the proceeds.
Money does not move directly to a crime boss in Phnom Penh or Guangzhou. It flows first into a dense forest of mule accounts—ordinary bank accounts opened in the names of small shopkeepers, students or the unemployed in exchange for a few thousand rupees. In a recent crackdown under “Operation Chakra-V”, the CBI identified around 8.5 lakh mule accounts across more than 700 bank branches being used by cyber-crime syndicates(Economic Times).
The Andhra Pradesh police’s recent Eluru case, which uncovered a Cambodia-based syndicate behind a Rs 51.9-lakh digital arrest, exposed suspicious transactions worth about Rs 357 crore running through crypto wallets and illegal gateways with links to Chinese-controlled servers.
WHY INDIA IS A FERTILE GROUND FOR SCAMMERS
India’s vulnerability to digital arrest is the dark underside of a much-celebrated success story.In 2024, UPI processed 17,221 crore transactions worth about Rs 246.8 lakh crore; by October 2025, monthly UPI payments alone had touched a record Rs 27.28 lakh crore through 20.7 billion transactions(PIB).
Nearly 954 million internet subscribers, including almost 400 million in rural India, are now online, with over 95 per cent of India’s villages having 3G/4G coverage and digital payments account for more than 99 per cent of all transactions by volume in the formal financial system.
This is precisely what the scammers are piggy-backing on. A population that has leapfrogged into cashless payments in under a decade is still learning cyber hygiene.
ROLE OF THE BANKS
Every rupee extorted must eventually enter, traverse, and exit a bank account or payment-system ledger. The CBI’s own enquiry into 8.5 lakh mule accounts has led to questioning of bank officials suspected of having helped syndicates circumvent KYC norms, sometimes for small commissions.
Banks are, nevertheless being thrust into the role of first responders(RBI).
Public advisories by SBI, HDFC and others now explain that no legitimate officer will ever demand “security deposits” or online KYC over video calls.Some institutions have started using AI-driven pattern recognition to flag clusters of small deposits flowing rapidly into newly opened accounts—one hallmark of mule networks(Supreme Court Observer).
Low-friction digital payments—instant onboarding, one-tap transfers, bulk payout features—are the great selling point of India’s fintech revolution. The same features are manna for digital-arrest syndicates trying to move money through 13 layers of accounts in hours.
WHAT ARE OTHERS DOING
India is not alone in facing this new species of fear-driven, impersonation-based fraud.
In the United Kingdom, police forces have long battled “courier fraud”, in which scammers pose as police officers or bank staffand send couriers to collect bank cards, cash or gold from terrified pensioners. Recent operations by the Metropolitan Police led to huge recovery, but not before an 80-year-old woman lost more than £600,000 in one case(The Guardian).
Australia has grappled with “Chinese authority” scams: international students and migrants receive calls from fraudsters that threaten deportation or arrest unless large sums are wired. Scamwatch data show millions of dollars lost in just the first five months of 2025.
Singapore has gone a step further by creating a dedicated Anti-Scam Command (ASCom) and “Scam Strike Teams” in every police division. A new Protection from Scams Act, will further empower banks and telecom operators to block suspicious transfers and calls, with clearer liability rules for victims(scamshield.gov.sg).
Interpol’s Operation First Light 2024—spanning 61 countries—targeted scams, freezing 6,745 bank accounts, arresting 3,950 suspects and seizing assets worth about US$257 million.
The core lesson from these experiences is straightforward. An enabling legal framework specialised anti-scam units, aggressive targeting of mule-account networks, and hard-hitting public awareness campaigns are essential.
For India, it means that an architecture that can move Rs 27 lakh crore in a month can, and must, also move fast enough to ensure that people are not “arrested” by a call they never should have answered.
(Views expressed are the author’s own).
Parneet Sachdev, IRS is the Chairman of Real Estate Regulatory Authority and a leading author.