New Delhi, Oct. 29 -- The Supreme Court of India has called for banks and financial institutions to compensate victims of digital arrest scams and other cyber frauds when investigations establish that financial losses resulted from a failure to exercise due diligence. The apex court emphasised that compensation in such cases should not be less than the amount lost by the customer, while pressing for stronger banking safeguards to prevent suspicious transactions before money reaches fraudsters.

A three-judge bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana made the observations on Thursday while hearing suo motu proceedings concerning the growing menace of digital arrest scams. The court stres...