Amount Involved In Cases Of Banking Fraud Increases By 714 Per Cent In First Half Of FY25: RBI

The digitisation of banking creates a lot of ease for users as they are able to access banking facilities online. Amid the rising popularity of online banking, a significant increase in bank fraud has also been witnessed in the ongoing fiscal (FY 2024-25).

A report by the Reserve Bank of India titled ‘Trend and Progress Of Banking In India’ showed that the amount involved in instances of fraud has increased by 714.6 per cent to Rs 21,367 crore in the first half of FY 25 compared to Rs 2623 crore in the first half of FY24.

In the first half of the fiscal (April-September), the number of incidents of bank fraud grew to 18,461 according to the RBI. The report showed that there has been a 27.49 per cent increase in the number of such incidences of fraud as the number of such cases was 14,480 in the same period of the preceding fiscal.

The RBI also said that based on the date of occurrence the internet and card frauds made up 85.3 per cent of all instances of fraud in 2023-24. In 2023-24 as much as 44 per cent of the total money involved in such cases was defrauded through internet and card-related frauds. In terms of number of frauds, the share of card and internet frauds was highest for all bank groups.

In 2023-24, the number of fraud cases reported by Private Sector Banks accounted for 67.1 per cent of the total number of cases. However public sector banks had the highest share in terms of the money involved in such cases of fraud.

The RBI said that the instances of penalty imposed on regulated entities (REs) increased during 2023-24 across all bank groups, except Foreign Banks (FBs) and Small Finance Banks (SFBs). The total penalty amount imposed on regulated entities more than doubled in 2023-24, led by public and private sector banks.

The RBI also emphasised the need for banks and other regulated entities to enhance their operations to keep a check on unscrupulous activities.

“Going forward, there is a continuing need for banks to strengthen their risk management standards, IT governance arrangements and customer onboarding and transaction monitoring systems to check unscrupulous activities, including suspicious and unusual transactions,” the RBI said.