Number of Bank Fraud Cases Rise in India to 265%: RBI

The significant increase in the number of bank frauds suggests that scammers are becoming more active and finding new ways to target individuals. This could be due to factors like increased digital banking adoption or new fraud techniques.
  
The number of bank frauds involving credit/debit cards and internet banking has jumped nearly 5 times in both number of cases and the amounts involved. These account for nearly one in ten rupees lost in bank frauds last year.
 
According to the Reserve Bank of India's annual report for 2024, the number of bank fraud cases has surged by a staggering 265%. This sharp rise highlights significant vulnerabilities within the banking system, underscoring the need for enhanced security measures and stricter regulatory oversight.
 
The report attributes this increase to the growing complexity of financial transactions and the sophisticated methods employed by fraudsters. The RBI is expected to implement new strategies to combat this alarming trend and protect the integrity of the banking sector.

 
The report indicates a remarkable 46.7% decline in the total amount involved in frauds compared to the previous year, even when the absolute amount of cases has more than doubled.
 
The report states, over the last three years, private sector banks have consistently reported the highest number of fraud cases. Despite this, public sector banks continue to contribute the most in terms of the total fraud amount.

At the same time, Frauds in private sector banks predominantly involved small-value card and internet transactions. In contrast, public sector banks faced significant frauds primarily in their loan portfolios.
 
The RBI’s focused efforts on reducing fraud amounts and improving detection mechanisms are evident in the report. The planned initiatives for 2024-25 aim to further strengthen the banking sector’s resilience against frauds, ensuring a safer and more secure financial ecosystem.
 
The bulk of the increase in the number of cases comes in the form of frauds involving credit/debit cards or internet banking. However, the amounts lost in these scams tend to be smaller in size than an average loan fraud.
 
The RBI report also highlighted that the loan frauds still account for the biggest chunk of all bank frauds in the country.