RBI Reports Surge: Bank Frauds Up Nearly 300%, Digital Frauds Up 708% In Last 2 Years

The Reserve Bank of India in its annual report has said that there is an increase of 300% and 708%  in Bank frauds and digital fraud respectively over the past two years. The report comes a month after the Centre held deliberations with fintech startups and law enforcement agencies to address challenges related to digital financial fraud.

RBI Report

An analysis of bank frauds reported in FY24 shows a significant increase in the number of cases, with 36,075 frauds reported, marking a nearly 300 percent rise from the 9,046 cases in FY22. Contradicting this surge in incidents, the total amount involved in these frauds has sharply decreased. 

According to the central bank’s annual report for FY24, the amount has dropped from Rs 45,358 crore in FY22 to Rs 13,930 crore in FY24, reflecting a 46.7 percent decline on an annual basis. This contrasting trend indicates a higher frequency of fraud cases but with a substantially lower monetary impact.

Interpretation of the Report

This report from RBI for FY24 highlights that the private sector banks reported the highest number of fraud cases, whereas public sector banks accounted for the majority of the fraud amount. In terms of the number of frauds, digital payment methods such as card and internet payments saw the most significant increase, with reported cases rising sharply from 3,596 in FY22 to 29,082 in FY24. However, when examining the value of fraud, the loan portfolio remains the primary concern. The value of fraud related to card and internet payments escalated from Rs 155 crore in FY22 to Rs 1,457 crore in FY24.

Despite the increased frequency of fraud incidents in the digital payment sector, the overall monetary impact is more substantial in loan-related frauds.

Conclusion: The FY24 central bank report highlights a sharp rise in fraud cases, particularly in the digital payments sector, while the overall fraud amount has decreased. Private banks report more cases, but public banks have faced higher monetary losses, mainly in loans. This highlights the need for improved security measures across both digital and traditional banking to combat evolving fraud threats effectively. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.