The Hindu Gist - 31st October, 2026
1 . Beyond Gullibility: Bank Measures Can Only Limit Damage from Digital Arrest Scams
The Supreme Court has expressed concern over the persistence of digital arrest scams, observing that victims cannot simply be blamed for falling prey to sophisticated fraud. With nearly ₹800 crore reportedly lost despite growing awareness and public warnings, the focus must shift towards institutional accountability, banking safeguards and protection of victims.
Digital Arrest Scams and Institutional Safeguards
- Nature of the problem: Scammers impersonate CBI or police officers and exploit fear of law enforcement, particularly targeting elderly citizens. Victims are pressured into transferring savings under the threat of arrest or legal action.
- Supreme Court’s intervention: Chief Justice of India Surya Kant, during the October 29 hearing, questioned the tendency to attribute such frauds merely to victims’ gullibility and welcomed the RBI’s efforts to strengthen banking safeguards.
- Draft RBI KYC Amendment Directions, 2026: Following the Supreme Court’s directions, the RBI issued draft amendments to its KYC Directions, 2025, proposing a Standard Operating Procedure for temporary debit holds on accounts or transactions linked to suspected money-mule activity and cyber-enabled fraud. The Supreme Court is examining the proposed framework, which is expected to be notified by 30 November and made operational by 31 December 2026.
- Transaction monitoring: CBI investigations have revealed that banks often fail to identify suspicious transactions even after victims report fraud. Complete transaction histories and improved monitoring systems can help banks detect anomalous transactions faster.
- Implementation deadline: The Attorney-General assured the Court that the RBI directions would be enforced by December 31, making timely implementation important for preventing further financial losses.
Victim Protection, Banking Accountability and Implementation Challenges
- Zero-liability protection: The RBI’s 2017 circular provides protection against unauthorised electronic transactions, but victims coerced into voluntarily transferring money may not receive equivalent protection. This creates a gap between conventional banking safeguards and digitally induced financial fraud.
- Temporary debit restrictions: Under the new directions, transactions exceeding ₹1,000 or considered unusual against an account holder’s declared profile may be held for up to 60 days, or longer if directed by the police.
- Risk of disproportionate penalties: Small traders and Jan Dhan account holders may unknowingly receive money transferred through mule accounts. Freezing their accounts for two months or longer can impose an excessive burden on innocent account holders.
- Reporting and verification: Unusual transactions should be automatically reported to the police and physically verified. However, safeguards are necessary to prevent excessive surveillance and violations of privacy.
- Bank accountability: Genuine account holders must not be penalised for failures in banks’ monitoring and verification systems. Victim compensation and protection must accompany stronger fraud-prevention mechanisms.
- Cross-border organised crime: Scam compounds operating in Myanmar, Cambodia and Laos have reportedly flourished with varying degrees of official patronage. The involvement of trafficked Indians in these operations highlights the need for international cooperation and action against organised cybercrime networks.
2. Suboptimal Outcomes: Social Security Concerns of Unorganised Sector Workers Remain
One year after the implementation of the Code on Social Security, 2020, the constitution of National Social Security Boards for Unorganised Workers and Gig and Platform Workers marks a welcome step towards extending social protection. However, delayed constitution, centralised governance and inadequate representation of workers and States continue to limit their effectiveness.
Social Security Boards: Composition and Institutional Concerns
- Board for Unorganised Workers: Under Section 6 of the Code on Social Security, 2020, the National Social Security Board comprises 40 nominated members representing seven unorganised-sector worker representatives, seven employer representatives, seven civil-society experts, three Members of Parliament, ten Central Government Ministries/Departments, five State Governments and one Union Territory. The Union Labour Minister is the Chairperson, the Labour Secretary is the Vice-Chairperson and the Director General of Labour Welfare is the Member-Secretary.
- Board for Gig and Platform Workers: Under Section 114(6), the same National Social Security Board functions for gig and platform workers with a modified composition of 22 members. It includes five aggregator representatives, five worker representatives, the Director General of ESIC, the Central Provident Fund Commissioner, expert members, five State Government representatives and the Joint Secretary, Ministry of Labour and Employment as Member-Secretary, in addition to the Chairperson and Vice-Chairperson.
- Centralisation of governance: Both boards are constituted by the Union Government, with inadequate representation of State Governments. This limits their ability to address region-specific concerns.
- Representation deficit: The boards lack significant representation of Central Trade Unions, including those from the Opposition, and representatives of State Governments ruled by the Opposition. This weakens inclusive consultation and institutional accountability.
- Federal concern: Labour is a subject in the Concurrent List, requiring both Union and State Governments to work together to improve workers’ living standards. The present institutional arrangement does not adequately reflect this shared responsibility.
- Delayed constitution: Although the establishment of the boards is a welcome development, their delayed constitution has postponed the institutional response required to address workers’ social-security concerns.
Social Security Deficit and the Way Forward
- Meaning of social security: The International Labour Organisation (ILO) defines social security as protection provided by society to ensure access to healthcare and income security during old age, unemployment, sickness, disability, work injury, maternity and loss of a breadwinner.
- Coverage versus actual protection: Social security coverage reportedly increased from 19% in 2015 to 64.3% in 2025, covering around 94 crore citizens. However, unorganised and gig/platform workers, who constitute more than 92% of India’s workforce, remain inadequately protected.
- Expert recommendations: The National Commission for Enterprises in the Unorganised Sector (NCEUS), headed by economist Arjun Sengupta, had recommended a gradual expansion of social security for informal workers. Yet, their concerns remain largely unresolved.
- State-level concerns: A report prepared by Justice V. Gopala Gowda for the Kerala Government in March 2026 identified anti-federal and anti-worker characteristics in the Social Security Code and suggested amendments.
- Way forward: The Union Government must strengthen State participation, ensure adequate representation of Central Trade Unions and worker organisations, and address implementation gaps. Both Union and State Governments must develop responsive mechanisms to extend effective social protection to unorganised and gig/platform workers.
The Indian Express Gist - 31st October, 2026
1 . $6.3 Billion Stolen in 20 Minutes: Inside the Mega Binance Hack
The world’s largest cryptocurrency exchange, Binance, suffered a massive security breach in which cyberattackers stole approximately $6.3 billion in cryptocurrency within 20 minutes. The incident exposed vulnerabilities in cryptocurrency exchange infrastructure, triggered market volatility and raised concerns over the security of digital assets and interconnected blockchain networks.
Nature of the Cyberattack and Security Vulnerabilities
- Nature of breach: Binance’s initial investigation suggested that a compromised DevOps engineer’s laptop may have enabled attackers to access a service container and submit unauthorised withdrawal transactions. The company subsequently confirmed that additional points of breach had been uncovered, while the complete attack sequence remained under investigation.
- Attack mechanism: According to blockchain analytics firms TRM Labs and Chainalysis, the attack bore similarities to previous large-scale cyberattacks attributed to North Korea. Attackers reportedly used empty wallets to order wallets controlled by Binance to transfer assets into hacker-controlled wallets.
- Infrastructure vulnerability: The attackers compromised the transaction-authorisation pathway used by Binance’s hot-wallet infrastructure. Although Binance reported no evidence of wallet private-key leakage, attackers were able to exploit the compromised access to authorise unauthorised transactions and drain cryptocurrency from the wallets.
- Need for containment: Access to a DevOps system can expose additional entry points into an exchange’s infrastructure. Rapid identification and containment of such breaches are therefore critical.
- Previous cyberattacks:
- In 2019, approximately $40 million in Bitcoin was stolen from Binance through viruses and phishing techniques.
- North Korea’s state-backed Lazarus Group reportedly stole around $1.5 billion from Bybit through spoofing last year, with only a small portion recovered.
Market Impact, Institutional Response and Implications for India
- Cryptocurrency market volatility: Following the breach, Bitcoin fell 5%, reaching its lowest level since September, while Ethereum declined by 5%. Other major cryptocurrencies also experienced sharp sell-offs, reflecting the wider market impact of a security failure at a major exchange.
- Binance’s response: The exchange assured users that it would cover losses from its own funds, revoked the network access responsible for the breach and informed law-enforcement agencies and blockchain intelligence platforms.
- Asset protection: Binance initially suspended deposits and withdrawals but subsequently clarified that deposits would remain unaffected and withdrawals could resume within 48 hours. Around $3 billion in funds were blocked, representing assets frozen by Binance and other entities, including blockchain-enabled platforms Tether and Circle.
- Impact on India: The breach could indirectly affect Indian cryptocurrency investors because Binance plays an important role as an overseas liquidity provider for parts of India’s cryptocurrency market. However, estimates of Indian user exposure to Binance should be treated cautiously in the absence of independently verified user-level data.
- Indirect exposure: Even Indian exchanges such as CoinDCX have exposure to Binance, demonstrating the interconnected nature of cryptocurrency markets and the possibility of overseas security failures affecting domestic investors.
- Broader concern: The incident highlights the need for stronger cybersecurity infrastructure, secure access controls, real-time monitoring, coordinated incident response and greater accountability among cryptocurrency exchanges.
2. The Intricate System to Elect MLCs
MLC elections differ from general elections because they involve preferential voting by MLAs, local authorities, graduates and teachers, alongside nominations by the Governor. The system is designed to provide representation to different sections of society and make Legislative Councils a revising chamber within State legislatures.
Legislative Council: Composition, Electoral Process and Constitutional Position
- Constitutional framework: Article 169 empowers Parliament to create or abolish a State Legislative Council following a resolution passed by the State Assembly by a special majority. A Council must have at least 40 members and cannot exceed one-third of the strength of the Legislative Assembly.
- Composition under Article 171:
- One-third elected by members of local authorities.
- One-twelfth elected by graduates.
- One-twelfth elected by teachers.
- One-third elected by members of the Legislative Assembly.
- The remaining one-sixth nominated by the Governor from persons having special knowledge or practical experience in literature, science, art, the cooperative movement and social service.
- State-wise distribution: Six States currently have functioning Legislative Councils: Andhra Pradesh, Bihar, Maharashtra, Karnataka, Telangana and Uttar Pradesh. Madhya Pradesh has never constituted its proposed Legislative Council, while Tamil Nadu’s Legislative Council was abolished in 1986. The seat distribution among electoral categories varies across States.
- Eligibility and electoral rolls: An MLC candidate must be at least 30 years old and an elector in the State. Graduate-constituency voters must have held a recognised graduate qualification for at least three years before the qualifying date and be ordinarily resident in the constituency. Teacher-constituency voters must have been engaged in teaching for at least three years during the six years preceding the qualifying date in an educational institution not lower than the prescribed secondary-school level.
- Local-authority constituencies: Voters are current members of local bodies such as municipalities and other territorial institutions. Graduate and teacher constituencies have separate electoral rolls, which are revised before elections; eligible voters must register and satisfy the prescribed qualifications.
- Tenure: MLCs serve six-year terms, with one-third retiring every two years. The Council is a continuing House and is not subject to dissolution.
- Legislative role: Unlike the Rajya Sabha, which represents States at the Union level, a Legislative Council is a second chamber within a State legislature. It acts as a revising and deliberative chamber, providing space for reconsideration and specialised perspectives. However, it cannot permanently block legislation passed by the Legislative Assembly.
- Creation and abolition: Six States have functioning Councils. It highlights the political debate surrounding their creation, including Rajasthan’s Legislative Assembly resolution of 18 April 2012 seeking a Legislative Council. The Rajasthan Legislative Council Bill was subsequently introduced in Parliament in August 2013. Supporters consider a second chamber useful for wider representation and legislative scrutiny, while critics argue that it can increase expenditure, delay legislation and become a political accommodation mechanism.
Preferential Voting and Election of MLCs and Rajya Sabha Members
- Single Transferable Vote (STV): MLC elections are not conducted through ordinary single-choice voting. Voters rank candidates in order of preference—first, second, third and so on—on a ballot paper. This allows votes to be transferred according to subsequent preferences.
- MLA elections: MLAs elect one-third of the MLCs through preferential voting. In these elections, MLAs do not have to show their votes to their party’s election agent, unlike the Rajya Sabha voting arrangement described in the report.
- Quota calculation for Rajya Sabha elections: The required number of votes is calculated by dividing the total number of MLAs voting by the number of seats plus one, and adding one to the result. For example, if 200 MLAs vote for four seats, the quota is 200 ÷ (4 + 1) + 1 = 41 votes.
- Transfer of votes: A candidate securing the required quota is elected. Any surplus votes are transferred according to the next preferences marked by voters. If no candidate reaches the quota, the candidate with the lowest votes is eliminated and their votes are transferred to the next available preferences. The process continues until all seats are filled.
- Purpose of preferential voting: It enables proportional representation and allows candidates to secure election through transferred preferences rather than depending exclusively on first-preference votes.
Ballot Papers in Indian Elections: Continued Relevance and Use
- Continued use: Despite the expansion of EVMs, ballot papers remain widely used in local elections. A 2023 study by the Indian Institute of Public Administration (IIPA) found that around 53% of States conducting gram panchayat elections used ballot papers.
- State-level variation: Only three States/UTs—Kerala, Sikkim and Dadra and Nagar Haveli and Daman and Diu—were reported to use EVMs in all gram panchayat constituencies. Other States use ballot papers or a combination of ballot papers and EVMs. However, the share of EVM use increases at the higher tiers of panchayat elections, particularly at the intermediate and district levels. The IIPA study reported that 17% of States used EVMs in all district/zilla panchayat constituencies.
- Administrative and logistical constraints: Panchayat elections often involve multiple tiers, numerous candidates and simultaneous contests. This makes EVM configuration, manpower deployment and counting more complicated. Ballot papers may be more practical in such circumstances.
- Financial considerations: Shortage of funds, particularly at district and panchayat levels, also influences the choice of voting method. EVM deployment requires procurement, maintenance, manpower and logistical arrangements.
- Municipal and student elections: Municipal corporation elections generally use EVMs, although the method varies across States. Delhi University Students’ Union elections use EVMs, whereas Jawaharlal Nehru University Students’ Union elections use ballot papers. Other university elections also vary according to institutional decisions.
- Single transferable vote and ballot papers: Preferential elections, including Rajya Sabha and Legislative Council elections, use ballot papers because voters must indicate multiple preferences. Under Article 171, voters mark first, second and subsequent preferences, allowing surplus votes and votes of eliminated candidates to be transferred.
- Open ballot in Rajya Sabha: Rajya Sabha elections follow an open-ballot arrangement in which MLAs show their marked ballot to the authorised party agent. This requirement does not apply in MLC elections.
