Cyber fraud in India has seen a dramatic rise. In FY2023, there were 75,800 cases reported with losses of ₹421.4 crore. In just a year, those numbers jumped to 2,92,800 cases and ₹2,054.6 crore in losses by FY2024. That’s a 5x increase - a sign that cyber fraud is not just growing but exploding.
To tackle this, the Government of India has provided the National Cybercrime Reporting Portal (cybercrime.gov.in) and a dedicated helpline: 1930 to report such incidents. The National Crime Records Bureau (NCRB) also compiles data across categories like online banking fraud, OTP scams, and credit/debit card fraud.
Thousands of bank accounts are being fully frozen due to complaints filed with the cybercrime department. And often, no one knows when or if access to their own money will be restored.
Let’s break down how this system typically works:
What Does It Mean When a Bank Account Is Frozen?
An account freeze happens when a bank, acting on directions from law enforcement agencies or regulatory authorities, blocks access to the funds in a customer’s account. This is usually done in connection with investigations into financial crimes such as fraud, cybercrime, or money laundering.
While such actions are legally permitted during ongoing investigations, they are supposed to follow due process - including informing the account holder and freezing only the amount suspected to be involved in the alleged crime. Unfortunately, in practice, these guidelines are often overlooked, leaving innocent individuals locked out of their own money indefinitely.
A real-life example was recently shared by Mr. Mandal, a TechnoFino Community member, who has been suffering for 19 months due to a poorly handled cybercrime complaint.
The issue? Back on December 8, 2023, based on a cybercrime complaint, IndusInd Bank froze Mr. Mandal’s savings account. As per the complaint, Mr. Mandal had received ₹27,140 on April 23, 2023, from Mr. Goyal - an amount allegedly linked to fraudulent activity.
A UPI-related fraud of around ₹1.36 lakh was reported by Mr. Rathod. According to the transaction trail, a portion of that amount was transferred from Mr. Rathod’s account to Mr. Goyal, and then to Mr. Mandal.
But here's the question - how did the cyber police determine that exactly ₹27,140 received by Mr. Mandal was part of the fraud? This was a UPI transfer, and unlike digital currency, a regular bank balance doesn’t come with a unique tracking ID. Mr. Goyal sent money to several people on the same day, yet surprisingly, his own account hasn't been blocked by the cybercrime department.
To this day, Mr. Mandal is still fighting to get his account unfrozen. He had to hire a lawyer to submit a formal request to the cybercrime department. Despite contacting the concerned police officer and sending multiple emails, the account remains frozen.
He has nearly ₹1 lakh in that account but can't access a single rupee due to this complaint.
Mr. Mandal even requested IndusInd Bank to hold just ₹27,140 and unfreeze the remaining balance. But his request was denied. According to IndusInd Bank, they are simply following the orders issued by the cybercrime department - fair enough.
The Legal Framework for Freezing Bank Accounts in India
Under Indian law, investigating agencies have the authority to freeze bank accounts during criminal investigations. This power is granted through Section 102 of the Criminal Procedure Code (CrPC), now replaced by Section 106 of the Bharatiya Nyaya Sanhita (BNSS). However, the use of this authority comes with important legal responsibilities.
Partial Freezing Only: Courts across India have consistently ruled that freezing an entire bank account indefinitely is not justified. Only the amount suspected to be involved in the alleged crime should be blocked - not the full account balance. Moreover, the account holder has a right to be informed about the reason for the freeze and the specific amount in question.
Mandatory Judicial Oversight: According to the law, any account freeze must be promptly reported to a judicial magistrate. This critical step is often overlooked in practice, leaving account holders unaware of the status or reason behind the freeze.
Despite clear legal guidelines, many individuals still face complete account freezes without any formal communication or transparent explanation from the authorities.
The court ruled that:
Mr. Mandal's case is still unresolved, nearly 19 months later. Like many others, he is stuck in a slow, overburdened legal system - with no end in sight.
Cybercrime is real, and action is necessary - but collateral damage to innocent users should never be the price of justice.
If we don't act now, more people like Mr. Mandal will suffer silently, just for being in the wrong place at the wrong time in the UPI trail.
To tackle this, the Government of India has provided the National Cybercrime Reporting Portal (cybercrime.gov.in) and a dedicated helpline: 1930 to report such incidents. The National Crime Records Bureau (NCRB) also compiles data across categories like online banking fraud, OTP scams, and credit/debit card fraud.
But There’s Another Side to the Story
While this department is critical in fighting financial crimes, there's an increasing number of cases where innocent people are being punished, not protected.Thousands of bank accounts are being fully frozen due to complaints filed with the cybercrime department. And often, no one knows when or if access to their own money will be restored.
Let’s break down how this system typically works:
How Cybercrime Departments Handle Banking Fraud Reports
- The victim reports the fraud on the Cybercrime Portal.
- The complaint is forwarded to the respective state Cyber Cell or local police station.
- The victim or suspects may be contacted for supporting documents like bank statements, UPI records, or screenshots.
- The Cyber Cell starts an investigation, tracing the digital trail of the money and gathering data from banks, telecom operators, and even social media.
- As part of the investigation, banks often freeze the suspect's account, following a written or verbal order from Cyber Police.
- If the fraud is traced quickly and funds are available, the bank may reverse the transaction. In other cases, legal action and arrests may follow.
What Does It Mean When a Bank Account Is Frozen?
An account freeze happens when a bank, acting on directions from law enforcement agencies or regulatory authorities, blocks access to the funds in a customer’s account. This is usually done in connection with investigations into financial crimes such as fraud, cybercrime, or money laundering.
While such actions are legally permitted during ongoing investigations, they are supposed to follow due process - including informing the account holder and freezing only the amount suspected to be involved in the alleged crime. Unfortunately, in practice, these guidelines are often overlooked, leaving innocent individuals locked out of their own money indefinitely.
When the Cure Becomes Worse Than the Disease
While this system is necessary to protect victims, it's far from perfect.A real-life example was recently shared by Mr. Mandal, a TechnoFino Community member, who has been suffering for 19 months due to a poorly handled cybercrime complaint.
Case Study: The IndusInd Bank Freeze That Ruined One Man’s Financial Stability
On December 8, 2023, Mr. Mandal’s IndusInd Bank savings account was frozen, allegedly due to a cybercrime complaint.The issue? Back on December 8, 2023, based on a cybercrime complaint, IndusInd Bank froze Mr. Mandal’s savings account. As per the complaint, Mr. Mandal had received ₹27,140 on April 23, 2023, from Mr. Goyal - an amount allegedly linked to fraudulent activity.
A UPI-related fraud of around ₹1.36 lakh was reported by Mr. Rathod. According to the transaction trail, a portion of that amount was transferred from Mr. Rathod’s account to Mr. Goyal, and then to Mr. Mandal.
But here's the question - how did the cyber police determine that exactly ₹27,140 received by Mr. Mandal was part of the fraud? This was a UPI transfer, and unlike digital currency, a regular bank balance doesn’t come with a unique tracking ID. Mr. Goyal sent money to several people on the same day, yet surprisingly, his own account hasn't been blocked by the cybercrime department.
To this day, Mr. Mandal is still fighting to get his account unfrozen. He had to hire a lawyer to submit a formal request to the cybercrime department. Despite contacting the concerned police officer and sending multiple emails, the account remains frozen.
He has nearly ₹1 lakh in that account but can't access a single rupee due to this complaint.
Mr. Mandal even requested IndusInd Bank to hold just ₹27,140 and unfreeze the remaining balance. But his request was denied. According to IndusInd Bank, they are simply following the orders issued by the cybercrime department - fair enough.
The Legal Framework for Freezing Bank Accounts in India
Under Indian law, investigating agencies have the authority to freeze bank accounts during criminal investigations. This power is granted through Section 102 of the Criminal Procedure Code (CrPC), now replaced by Section 106 of the Bharatiya Nyaya Sanhita (BNSS). However, the use of this authority comes with important legal responsibilities.
Partial Freezing Only: Courts across India have consistently ruled that freezing an entire bank account indefinitely is not justified. Only the amount suspected to be involved in the alleged crime should be blocked - not the full account balance. Moreover, the account holder has a right to be informed about the reason for the freeze and the specific amount in question.
Mandatory Judicial Oversight: According to the law, any account freeze must be promptly reported to a judicial magistrate. This critical step is often overlooked in practice, leaving account holders unaware of the status or reason behind the freeze.
Despite clear legal guidelines, many individuals still face complete account freezes without any formal communication or transparent explanation from the authorities.
Legal Update: Madras High Court Takes a Stand
A recent judgment (W.P. No. 25631 of 2024) by the Madras High Court in the case of Mohammed Saifullah may change everything.The court ruled that:
Still, the Ground Reality Is Harsh
Despite the court's judgment, many cybercrime units continue to order full account freezes, causing severe financial stress for innocent people.Mr. Mandal's case is still unresolved, nearly 19 months later. Like many others, he is stuck in a slow, overburdened legal system - with no end in sight.
What Needs to Change?
- RBI must issue clear, enforceable guidelines on account freezing practices.
- The Cybercrime Department should be accountable for delays and unjust freezes.
- A faster grievance redressal system must be established for innocent account holders.
- India urgently needs stronger frameworks to deal with rising UPI fraud without punishing the wrong people.
Cybercrime is real, and action is necessary - but collateral damage to innocent users should never be the price of justice.
If we don't act now, more people like Mr. Mandal will suffer silently, just for being in the wrong place at the wrong time in the UPI trail.
