📷 Image Credits: The Economic Times
In a recent report by the Reserve Bank of India (RBI), it has been disclosed that fraud cases in Indian banks have spiked significantly over the past two years. The data shows a staggering 300% increase in fraud cases, with a total of 36,075 cases reported in the financial year 2023-24 as compared to 9,046 cases in FY 2022. However, despite the surge in the number of cases, the total amount involved in these frauds has witnessed a sharp decline of 46.7% to Rs 13,930 crore.
The report highlights that the majority of frauds in Indian banks are occurring in the digital payments sector, with the highest value frauds being reported in the loan portfolios. Interestingly, public sector banks have been found to contribute the most by value to these fraudulent activities.
Moreover, the RBI’s annual report also emphasized the need to enhance fraud detection mechanisms and improve the overall payment experience for customers. One of the proposed solutions is the introduction of real-time payee name validation before fund transfers, in alignment with the newly enacted ‘Digital Personal Data Protection Act, 2023’. This measure aims to curb fraudulent activities and ensure a secure financial environment for all stakeholders.
The analysis of bank group-wise fraud cases over the past few years indicates a consistent trend where private sector banks report the maximum number of frauds, while public sector banks continue to contribute the most in terms of the total fraud amount. The report underscores the importance of addressing frauds in both digital payment channels and loan portfolios to safeguard the financial interests of customers and maintain the integrity of the banking system.
In conclusion, the RBI’s report sheds light on the critical issue of increasing bank frauds in India and the urgent need for proactive measures to mitigate these risks. With the surge in digital transactions and technological advancements, it is imperative for regulatory authorities, financial institutions, and customers to work together towards building a secure and resilient banking ecosystem in the country.
