Indian Banks witnessed Rs 5.3 Lakh Crore of frauds reported in last 10 years

It is reported that according to Reserve Bank of India (RBI) data, the Indian banks have seen an increase in fraudulent activities, with a staggering Rs 5.3 lakh crore worth of frauds reported in the last 10 years, from 2013-14 to 2022-23.

Collectively, both private and public sector banks reported a total of 4,62,733 fraud cases during the period. The highest number of frauds were reported in Maharashtra, followed by Delhi, Haryana, Tamil Nadu, and Uttar Pradesh. Other states like Karnataka, Gujarat, Telangana, West Bengal, and Rajasthan also saw a significant number of bank frauds, ranging from 8,000 to 12,000, over the past decade.      

The experts are of the opinion that these frauds are growing because of the increasing adoption of digital banking services.

The analysis of RBI’s annual reports indicates that a majority of these frauds are related to advances (loans), card transactions, and digital/internet banking. For instance, in the financial year 2022-23 (FY23), banks reported the highest number of frauds (6,659 out of 13,530) through cards and internet banking. Frauds related to advances were also substantial at 4,109 in FY23. This trend has been consistent over the past few years, with a gradual rise in digital banking frauds.  

The RBI has alerted people regarding scams disguised as KYC (Know Your Customer) updates. These frauds typically involve unsolicited calls, SMS, or emails tricking customers into revealing personal information.

To fight against the threats, banks are strengthening their digital security infrastructure by investing in new technologies like Artificial Intelligence (AI) and Machine Learning (ML) to enhance services and minimize fraud instances. Additionally, the implementation of the data privacy law is expected to further tighten the noose around online fraudsters.

The RBI and banks are taking multi-pronged approaches to address this critical issue. Educating the public about online frauds, investing in advanced security measures, and a sharper focus on risk management hold the key to mitigating these financial crimes.