Kerala Police Files — Part II
Kerala Police data shows a clear gap between money involved in cyber fraud, money placed on hold and money actually returned; the issue raises similar questions for Maharashtra
THIRUVANANTHAPURAM/MUMBAI: Kerala Police’s own cyber-fraud data shows a wide gap between money involved in fraud, money put on hold and money actually returned to victims. In five Special Disruption Operations involving ₹583.19 crore, Kerala Police managed to put ₹104.01 crore on hold, but only ₹46.89 crore had been refunded to complainants, according to the September 2026 media brief of the Kerala Cyber Crime Coordination Centre (K4C). Another ₹2.63 crore was restored through the Money Restoration Portal.
The issue was discussed during an interaction with journalists from Maharashtra during the Press Information Bureau (PIB) Kerala press tour. Senior cyber officials acknowledged that freezing money and returning it to victims are two different processes. They pointed to banking, legal and judicial procedures as major hurdles in restoration.
The figures raise a basic question: if police can trace and stop the money, why does a large part of it still not return quickly to the victim?
‘Saved’ and ‘Refunded’ Are Not the Same
The distinction becomes important while reading another set of Kerala Police figures. K4C says it has handled 1,47,761 complaints through the National Cyber Crime Reporting Portal (NCRP) and describes ₹405.93 crore as citizens’ money “saved”. It also says 1,09,763 mule accounts were identified and blocked. But the same document separately records money placed on hold and money actually refunded.
Therefore, “saved” cannot automatically be treated as “returned to victims”. This distinction is important because the final relief for a cyber-fraud victim is not merely tracing or freezing the stolen money. The money has to come back.
Where Does the Money Get Stuck?
Cyber-fraud money can move through several bank accounts within minutes. Fraudsters often use mule accounts, UPI IDs, digital wallets and multiple transfers to move the amount before the victim reports the fraud. K4C says it analyses NCRP and 1930 complaints, transaction trails, mule accounts, UPI identifiers and mobile numbers to trace links and stop further movement of the money. Its mandate also includes coordination with banks and financial institutions for freezing and restoration of funds. But once the money is put on hold, another process starts.
Questions arise over ownership, multiple claims, jurisdiction and release of the amount. The problem becomes more complex when the same mule account is linked to complaints registered in different states.
Kerala Police-Bank Coordination
Kerala has created a Joint Cyber Coordination Centre (JCCC) to improve coordination between police and financial institutions. According to the K4C brief, the mechanism is intended to speed up information sharing, transaction intervention, escalation of delayed cases and tracing and recovery of funds. Kerala Police has also conducted four rounds of Operation Cy-Hunt.
The official data records 6,251 suspects identified, 1,695 FIRs registered, 502 arrests and 1,065 notices issued under Cy-Hunt 1.0 to 4.0. The enforcement system is active. The larger problem is converting a freeze into a refund.
Centre Introduces Money Restoration Module
The problem is not limited to Kerala. The Union Home Ministry issued a Standard Operating Procedure for the National Cyber Crime Reporting Portal and Citizen Financial Cyber Fraud Reporting and Management System in 2026. The SOP covers complaint processing, bank coordination, grievance redressal, removal of lien markings and restoration of defrauded money.
A Money Restoration Module and Grievance Redressal Module became operational from April 2026 to speed up refund of defrauded money and deal with disputes relating to frozen accounts and lien markings. The Centre has also said that the SOP was introduced because money blocked inside the banking system needed to be returned to victims faster. In June 2026, the Union Home Ministry said around one lakh citizens had benefited from the Money Restoration and Grievance Redressal mechanism.
National Figures Show the Gap
The national figures are even more striking. Between financial years 2023-24 and 2025-26, more than ₹56,087 crore was reported in cyber-fraud complaints on NCRP. Of this, more than ₹9,079 crore was marked under lien, while more than ₹206 crore had been refunded, according to information placed before Parliament by the Union Home Ministry.
The Kerala Special Disruption figures and the national NCRP figures cover different datasets and cannot be directly compared. But both show one common problem: money stopped is much higher than money actually returned.
Also Read: Inside Kerala Police’s P-Hunt: 7,862 Searches, 2,172 Cases in Fight Against Online Child Abuse
Maharashtra Faces the Same Question
The issue is equally relevant to Maharashtra. On July 27, 2026, the Maharashtra government declared the Maharashtra Cyber office as the State Cyber Crime Coordination Centre (S4C) on the lines of the Indian Cyber Crime Coordination Centre (I4C). The new structure is expected to strengthen coordination in cybercrime investigation. But the victim-side data now needs to be examined.
How much money have people in Maharashtra reported losing to cyber fraud?How much was put on hold? How much was actually refunded? How many victims received their money back? and how much time does it take between freezing the amount and restoring it? These figures are more important than the number of accounts blocked or suspects identified. TheNews21 will seek these details from Maharashtra Cyber.
Reporting Quickly Still Matters
The Kerala interaction also underlined another important point — speed. The sooner a financial cyber fraud is reported, the better the chances of stopping the money before it moves through multiple accounts. The national 1930 cybercrime helpline and CFCFRMS were created for this purpose. The Centre says that till June 30, 2026, more than ₹11,158 crore had been saved in over 32.80 lakh complaints through the system. But stopping the money is only one stage.
The real relief comes when the money reaches the victim’s account again. That is where the system still faces its biggest challenge.
Tracing the money is difficult. Freezing it is difficult. But returning it to the victim remains the final test.
Next: Kerala Police Files — Part III: Inside Cyberdome and K4C
