Bank frauds in India have surged two-fold in the last year, according to the recent annual report by the Reserve Bank of India. However, the total amount involved in such fraud cases has reduced by 47 per cent, the report states. A total amount of Rs 13,930 crore has been lost in bank frauds in the financial year ended March 2024 in comparison to Rs 26,127 crore in 2022.
Frauds involving credit and debit cards or internet banking have contributed most to the high tide of bank frauds, the report states. However, the amounts scammed in these frauds were smaller in size when compared to an average loan fraud.
The RBI report also stated that though many of the frauds may have been reported in the past year, the actual fraudulent activities might have been committed earlier than that. As per the data, 89 per cent of all frauds in the bank sector reported in the previous financial year occurred way before.
In FY23, 94 per cent of the reported bank frauds took place in earlier years. The report flags the issue of delay in the detection of these frauds over a slight improvement in preventing te such scams.
The report provides an assessment of group-wise fraud cases in the banking sector over the last three years. It shows that private sector banks reported the maximum number of frauds. Public sector banks showed no significant improvement and continued to contribute maximum to the fraud amount.
The majority of these frauds were reported in:
- Digital transactions (in terms of volumes): Data shows that fraud cases reported by the payment banks surged to Rs 35 crore in a total of 472 cases in last the financial year (FY24). Meanwhile, only 68 cases were reported amounting to Rs 7 crore a year earlier.
There was an extreme uptick in fraud cases involving credit and debit cards as well as Internet banking in the past 12 months (till March 2024).
- Loan portfolio (in terms of value): Loan fraud cases account for the biggest ticket of all scams in the banking sector, the report shows. Around Rs 11,772 crore were lost in loan frauds of the total bank frauds of Rs 13,930 crore in FY24.
The report indicated that to prevent fraud and enhance the payment experience of the users further, the authorities would introduce a ‘real-time payee name validation’ before the actual fund transaction. “This will be explored in compliance with the newly enacted ‘Digital Personal Data Protection Act, of 2023’,” the report stated.
