₹23 Crore ‘Digital Arrest’ Scam: Victim Moves SC, Demands Full Restitution

A 78-year-old retired banker has sought full restitution of nearly ₹23 crore he lost in what is being described as Delhi’s biggest “digital arrest” fraud , challenging a partial compensation ordered by the banking regulator’s ombudsman.

The victim, Naresh Malhotra , alleged that he was defrauded of ₹22.92 crore between August and September 2025 through a sophisticated scam in which fraudsters impersonated law enforcement officials and coerced him into transferring funds under the pretext of a “digital arrest” investigation. Such scams typically involve cybercriminals posing as police or regulatory authorities, creating panic by alleging involvement in financial crimes and forcing victims to move money to so-called “secure” accounts.

In a recent order, the RBI Ombudsman directed five banks to collectively pay ₹1.31 crore as compensation. However, Malhotra has termed the relief grossly inadequate , asserting that it represents only a small fraction of his total loss.

He has argued that the ombudsman’s findings themselves establish institutional lapses , particularly failures in Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance, which he claims enabled the fraudulent transactions. Holding the banks directly accountable, Malhotra has demanded complete repayment of the defrauded amount , along with damages, interest, and compensation for capital gains tax liabilities .

Malhotra has filed an appeal with senior Reserve Bank of India officials and moved a criminal writ petition in the Supreme Court , which is expected to be heard in May.

“I have recovered only a small percentage. The money was stolen from me, and I will continue to fight until the entire amount is returned,” he said, underscoring his determination to pursue the case.