Bank frauds go up three times in two years, digital frauds up 708%: RBI

The banking sector experienced a rise in fraud cases with the number of such cases reached to 36,075 in the 2023-24 fiscal year, according to the Reserve Bank of India’s (RBI) annual report released on Thursday. Despite the increase in cases, the total amount involved in these frauds was reduced by 46.7 percent to ₹13,930 crore.

To curb fraud and improve the payment experience, the RBI report highlighted plans to introduce real-time payee name validation before fund transfers. This initiative will comply with the newly enacted ‘Digital Personal Data Protection Act, 2023’.

During 2023-24, the amount involved in frauds was ₹13,930 crore, down from ₹26,127 crore a year ago. The number of frauds increased to 36,075 during 2023-24 from 13,564 in the preceding financial year. An assessment of bank group-wise fraud cases over the last three years indicates that while private sector banks reported a maximum number of frauds, public sector banks continued to contribute maximum to the fraud amount, said the Annual Report for 2023-24.

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“Frauds have occurred predominantly in the category of digital payments (card/internet), in terms of number. In terms of value, frauds have been reported primarily in the loan portfolio (advances category),” the report said.

While small value card/internet frauds contributed maximum to the number of frauds reported by the private sector banks, the frauds in public sector banks were mainly in loan portfolios.

Further, an analysis of the vintage of frauds reported during 2022-23 and 2023-24 shows a significant time lag between the date of occurrence of a fraud and its detection.

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“The amount involved in frauds that occurred in previous financial years formed 94 per cent of the frauds reported in 2022-23 in terms of value,” the report said. Similarly, 89.2 per cent of the frauds reported in 2023-24 by value occurred in previous financial years.

With inputs from agencies.