Broken trust, frozen accounts: Cybercrime enforcement traps innocent citizens

Mangaluru

What began as a crackdown on cybercrime is fast turning into a nationwide concern, with innocent bank customers locked out of their own accounts, often without warning, clarity or recourse. While official numbers remain unclear, the volume of complaints across states suggests the issue is widespread and growing. Mangaluru-based cybersecurity expert Dr. Ananth Prabhu G has flagged the issue as a systemic failure, urging AAP leader and MP Raghav Chadha to raise it in Parliament.

The problem, he points out, lies not in intent but in execution. Account freezing is now carried out under provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), while digital evidence handling falls under the Bharatiya Sakshya Adhiniyam (BSA). On the ground, however, implementation remains inconsistent and poorly coordinated. Many freezes are triggered through transaction linkage analysis and fund trail mapping, tools designed to track suspicious money movement.

Increasingly, these are leading to false positives. Individuals who unknowingly transact with a flagged account suddenly find themselves treated as part of a chain without verification. A major concern lies in how banks respond. Instead of marking a lien for the disputed amount, entire accounts are often frozen, despite judicial guidance favouring proportionate restriction over blanket freezing. In many cases, customers are not even informed about the specific transaction under scrutiny, leaving them unable to respond or defend themselves. There is also no system for customers to view a digital audit trail or case linkage in real time.

The consequences are immediate and severe. With no access to funds, individuals struggle to pay EMIs, meet daily expenses or sustain businesses. Salaries remain blocked, cheques bounce and financial commitments collapse. There is currently no mandated timeline for review, verification, or unfreezing, often resulting in prolonged or indefinite restrictions with little clarity for affected customers. Communication gaps have only deepened the crisis. Customers are rarely given case references, transaction details or even basic audit trails. Formal intimation through SMS or email is often missing, leaving them guessing what went wrong and whom to approach.

Accountability, too, remains elusive. Banks cite police instructions, while police direct customers back to banks. Responsibility shifts between institutions, but the burden falls squarely on citizens. Jurisdictional challenges further complicate matters. Inter-state investigations frequently require individuals to engage with police stations far from their place of residence, an impractical and costly demand for most. In a digital age, such processes appear outdated. Remote solutions like secure video conferencing for statements, along with e-signatures, OTP authentication and recorded proceedings, could maintain evidentiary standards while reducing hardship. Another glaring gap is the absence of a centralized national platform linking banks and cyber cells. Inter-state coordination remains slow and fragmented, leading to delays and duplication.

The lack of standardized operating procedures means each state follows its own process, creating inconsistency and unpredictability. The long-term fallout is equally concerning. Prolonged freezes can damage credit scores, disrupt loan repayments and destabilize personal finances. In extreme cases, it amounts to a complete financial shutdown. There are also allegations of misuse, with claims emerging that money is being demanded to facilitate unfreezing, raising serious ethical and legal concerns.

With India rapidly advancing its digital economy, such systemic gaps risk eroding public trust. Fear of arbitrary account freezes could undermine confidence in digital banking itself. Dr. Prabhu has called for urgent intervention by the Reserve Bank of India and the Ministry of Home Affairs, stressing the need for clear national guidelines, strict adherence to due process and a single-window grievance redressal system to ensure time-bound resolution.