The Supreme Court has now demanded, in substance, what I argued in April 2024 and again in November 2025: that banks be made penally accountable, and that AI on transaction history be the preventive instrument. This post accepts the vindication, then concedes that indemnity alone will fail, and drafts the four mechanisms the RBI's 30 November SOP needs — a cooling-off hold, a two-way NCRP API, strict liability with a narrow defence, and an auditable algorithm.
The line worth keeping from Thursday's hearing is not about banks. "A report would only be a post-mortem. We are concerned with prevention," the Chief Justice said, telling the RBI that its 30 November SOP must make financial institutions indemnify victims for not less than the amount lost, suspend transactions out of line with a customer's history, and alert the nearest police station (Times of India, Hindustan Times). It led the morning papers (The Hindu digest, The Tribune, The Pioneer, WION, Daily Excelsior, Mirror Now, Zee News).
On 30 November 2025, after the Kerala High Court let banks debit-freeze "suspicious" accounts and asked the RBI to frame an SOP, I wrote "Suspicion's Freeze: My AI Prediction" — and spent half of it on who gets to define suspicious. On Thursday, of ordinary savers: "They have the complete audit trail. They can use AI." My prediction has arrived. The mechanism has not.
Let me first be disagreeable about my own demand. Indemnity alone will not work. A bank that must pay ₹5 lakh on a ₹5 lakh fraud will price the risk into its fees, staff a claims desk and litigate "due diligence" for years. Liability has to be cheap for a victim to trigger and expensive for a bank to dodge.
A caveat, and the reason to write now rather than on 1 December: much of 29 October was oral observation, not a signed order. The binding text will be the RBI (KYC) Amendment Directions, 2026 — notified by 30 November, operationalised by 31 December, with the Court vetting the draft first (Law of the Land).
The figures placed before the Court, from the I4C–MHA status report and the hearing:
- 21,928 digital-arrest complaints and over ₹647 crore on the NCRP, 1 January to 31 August 2026 (Hindustan Times, 30 Oct).
- 123,672 cases in 2024, 58,239 in 2025, 21,928 in 2026 to 1 September (Attorney General, same hearing).
- About ₹800 crore lost this year despite a 50% fall in cases (the Bench, as reported by The Tribune, 30 Oct).
- RBI's incoming compensation for e-banking fraud: at most ₹25,000, and only for losses up to ₹50,000.
| Instrument | What the SOP must say |
|---|---|
| Cooling-off hold | First high-value RTGS/NEFT from a retail account to a new beneficiary: 24-hour hold plus an IVR callback to the registered mobile — the CJI's "hit the mobile on the wall", done by the bank instead of by the victim. |
| Two-way NCRP API | A 1930 complaint freezes the downstream mule chain in minutes, not days. I proposed this in April 2024. It is overdue. |
| Strict liability, narrow defence | Bank pays unless it shows it both flagged the anomaly and attempted contact; personal prosecution where account-data leakage is established. |
| Auditable algorithm | Written reason for every AI freeze, a 24-hour appeal route, published false-positive rates. |
That last row is not decoration. An engine that can freeze a pensioner's savings is surveillance with a bank account — the worry I set out in "Surveillance is one step below Arrest" — and the standard should not drop because the watchman wears a bank's livery.
Nor does any of this reach the weakest link, which is identity. Delhi Police's IFSO arrested two men who ran fake health camps in Mathura to harvest Aadhaar and biometrics, activating over 3,000 SIMs and e-SIMs behind ₹2.64 crore of fraud (UNI, Mirror Now, Millennium Post). Trichy police seized a sim box farm behind ₹4.5 crore and 100-plus victims (TOI). SIM binding, which I wrote about in March, is half-built: the KYC falls at the camp, long before any bank AI sees a transaction.
That is the draft I would hand over before 30 November. Specifications, not adjectives.
With regards,
Hemen Parekh
www.Iam-Immortal.ai / www.IndiaAGI.ai / www.YourContentCreator.in
30 Oct 2026
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