The Reserve Bank of India (RBI) has issued draft Guidelines on freeze of Bank accounts as per Supreme Court Order dated August 4, 2026. The Supreme Court has directed the Reserve Bank to adopt and circulate the Standard Operating Procedure (SOP) prescribing the action to be taken by banks for placing temporary debit holds on amounts or accounts linked to money-mule activity and cyber fraud.
Procedure and Timeline for Temporary Debit Hold
| Step | Action | Timeline |
|---|---|---|
| 1 | The bank shall place a Temporary Debit Hold on the Suspected Money Mule Transaction or, if the account is a Suspected Money Mule Account, on the entire account. | Immediately |
| 2 | The bank shall notify the account holder of the Temporary Debit Hold, stating reasons, the process for removal, and the concerned officer’s contact details, through digital mode (if mobile number / e-mail is on record) or physical mode. | On putting the temporary debit hold, the bank shall immediately notify the account holder, if communicating through digital mode, otherwise by EOD of the next day. |
Procedure and Timeline for Removal of Temporary Debit Hold
| Step | Action | Timeline |
|---|---|---|
| 3 | The bank shall seek the explanation / justification on the genuineness of the transaction / account from the account holder. | The bank shall give 20 days’ time from the date of Temporary Debit Hold to the account holder for submission of the explanation / justification. |
| 4 | The bank shall examine the explanation (where received) and / or conduct due diligence (where no explanation is received), and shall either (a) remove the temporary debit hold immediately and notify the account holder on being satisfied with the explanation; or (b) continue the temporary debit hold and report to the Jurisdictional Police Authority via NCRP-CFCFRMS (date of reference), with reasons, and notify the account holder; accordingly, or (c) comply with direction / instruction of LEA / Competent Authority, if any, received during the period of 30 days. | (i) The bank shall take decision, within 10 days of receipt of the explanation / justification. In case no explanation is received, the bank shall take decision, within 30 days from date of temporary debit hold. (ii) The bank shall immediately notify the account holder of the decision taken by it, i.e., removal of the debit hold or the continuation of the same, if communicating through digital mode, otherwise by EOD of the next day. |
| 5 | The bank shall follow the instruction and notify the account holder where an instruction / direction (backed by appropriate statutory provisions) is received from LEA or a Competent Authority within 30 days from the date of reference. | The bank shall act immediately on receipt of the instruction from the LEA / Competent Authority. It shall notify the account holder of completion of its action immediately, if communicating through digital mode, otherwise by EOD of the next day. |
| 6 | The bank shall remove the temporary debit hold and notify the account holder where no instruction / direction (backed by appropriate statutory provisions) specifically requiring continuation of the temporary debit hold is received from the LEA or a Competent Authority within 30 days from the date of reference. | The bank shall remove the debit hold on the 31st day from the date of reference to the LEA. It shall notify the account holder of removal of debit hold immediately, if communicating through digital mode, otherwise by EOD of the next day. |
Maximum duration of a Temporary Debit hold, in the absence of any contrary instruction from an LEA or Competent Authority is 60 days from the date of temporary debit hold (up to 30 days for Steps 3–4, plus up to 30 further days for Steps 5–6).
Internal Policy
The internal policy for the purpose of this SOP shall provide for the following:
(i) the tech solutions identifying suspected money mule and cyber-enabled financial fraud related transactions;
(ii) norms for placing temporary debit hold on amounts or account level and scenarios for its removal. The Internal Policy shall ensure that the temporary debit hold at the account level shall be applied as a last resort and only in exceptional circumstances;
(iii) modes of communication and templates thereof for such communication to account holders;
(iv) process for linkage to MHA’s NCRP-CFCFRMS portal; and
(v) customer grievance redressal mechanism, etc.
The policy shall also provide for analysis of identified transactions at an appropriate level, based on objective parameters aimed at minimising the risk of flagging genuine transaction(s) / account(s).
Record Keeping
i. The bank shall maintain a centralised MIS recording which shall, inter alia, include date of temporary debit hold and reasons for the same, details of correspondence with account holder, including notifications given to the account holder at various stages, references and reporting to LEA and orders/directions received from LEA, and release of temporary debit hold, or continuation of debit hold status for every case.
ii. The bank shall continue to file Suspicious Transaction Reports (STRs) with FIU-IND under extant instructions; this SOP does not modify those obligations.
iii. Related records shall be retained for a minimum of 5 years from the date of placing a temporary debit hold. In case of an account closure, records shall be retained for a minimum period of 10 years from the closure.
iv. Records shall be made available for supervisory review.
v. The bank shall also ensure enhanced monitoring on such account(s) and other active account(s) / relationship(s) held by such account holders.
Grievances Redressal Mechanism
i. The bank shall designate Nodal Officer(s) at appropriate levels (Regional / Zonal / Head Office) for coordination as well as for complaints arising from action taken under this SOP.
ii. Nodal Officer details (name, contact number, address, e-mail) shall be displayed prominently on the bank’s website and at all branches.
iii. Complaints shall be acknowledged on receipt and resolved within 30 days.
iv. The bank shall maintain an MIS to log, track and monitor complaints received under this SOP.
