CHALLENGES OF SFIO IN INDIA: STRUCTURAL LIMITS, NEED FOR PROSECUTION POWERS, AND ROLE OF DATA ANALYTICS IN FRAUD DETECTION

AUTHOR – HANNA MUSTHAFA, STUDENT AT AMITY UNIVERSITY, NOIDA

BEST CITATION – HANNA MUSTHAFA, CHALLENGES OF SFIO IN INDIA: STRUCTURAL LIMITS, NEED FOR PROSECUTION POWERS, AND ROLE OF DATA ANALYTICS IN FRAUD DETECTION, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (6) OF 2026, PG. 566-575, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/IJLRV6I6459

ABSTRACT

Corporate fraud has emerged as one of the most pressing challenges confronting the Indian economy in the post-liberalization era. With increasing globalization, digitalization, and complex corporate structures, fraudulent practices have evolved in sophistication, scale, and impact. The Serious Fraud Investigation Office (SFIO), established under the Ministry of Corporate Affairs, is India’s premier agency tasked with investigating complex corporate frauds. While the SFIO has played a significant role in uncovering high-profile scams and strengthening corporate governance, it continues to face numerous structural, procedural, and operational challenges that hinder its effectiveness.

This article critically examines the structural limitations of the SFIO, including issues related to institutional design, lack of autonomy, manpower constraints, and procedural inefficiencies. It further explores the pressing need to grant independent prosecution powers to the SFIO to enhance its functional efficacy and reduce dependency on other enforcement agencies. Additionally, the article highlights the transformative role of data analytics, artificial intelligence, and regulatory technology (RegTech) in strengthening fraud detection mechanisms, improving investigative efficiency, and enabling proactive regulatory oversight.

By adopting a doctrinal and analytical approach, this study argues that meaningful reforms—particularly institutional strengthening, legal empowerment, and technological integration—are essential to ensure that the SFIO can effectively combat modern corporate fraud. The paper concludes with policy recommendations aimed at enhancing the operational capabilities of the SFIO and aligning India’s corporate fraud enforcement framework with global best practices.

Keywords: SFIO, Corporate Fraud, India, Data Analytics, Prosecution Powers, Corporate Governance, Regulatory Framework, Fraud Detection, White-Collar Crime