Banking frauds triple in the past fiscal year: RBI data

The number of frauds detected in the banking system last fiscal almost tripled on year, even as the amount involved decreased. Public sector banks continue to contribute the most to the total fraud amount, data from the Reserve Bank of India showed. The amount involved due to fraud in public banks was Rs. 10,507 crores, while private banks incurred losses of Rs. 3,107 crores. The number of frauds due to card and internet transactions shot up more than four times, with 29,000 cases being detected in FY24.

In March 2024 alone, UPI touched 13,440 million transactions, according to data from the National Payments Corporation of India.

“With the increase in adoption of digital payments, frauds related to this are expected to rise. More people are transacting online, and the pace of financial education and awareness has lagged the extent to which people are adopting digital modes of payment,” said Anil Tadimeti, Lead Strategy at Bureau, a company that provides fraud management solutions.

In terms of value, frauds have been detected primarily in the loan portfolios, with an amount involving Rs. 11,772 crores, which is 84% of the total amount involved last fiscal. Loan frauds include any activity that deceives the borrower or lender.

“This is a trend that will hopefully reduce overtime because a cleanup exercise has been invoked for a few years with regulatory and supervisory actions. So there is more intense scrutiny on accounts and even on legacy accounts,” Tadimeti said. Concerted efforts are made on an ongoing basis towards enhancing financial inclusion,along with awareness campaigns, particularly in the backdrop of increasing usage of digital transactions, the RBI said in its annual report released on Thursday.