RBI Reports Eightfold Increase in Bank Fraud Cases to Rs 21,367 Crore in First Half of Fiscal Year
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New Delhi, Dec 28 (NationPress) There has been a dramatic rise in bank fraud incidents during the initial half of this fiscal year (April-September), with a staggering 18,461 cases totaling Rs 21,367 crore, according to a report from the Reserve Bank of India (RBI).
This represents an approximate 28 percent increase in the number of fraud cases (from 14,480 in April-September of FY24) and more than an eight-fold rise in the overall amount (from Rs 2,623 crore) compared to the same timeframe last fiscal year.
For FY 2023-24, internet and card frauds made up 44.7 percent of the total fraud amount and 85.3 percent of the incidents, as highlighted by the Central Bank in its report on the trends and progress of banking in India.
The report also revealed that private sector banks accounted for 67.1 percent of all fraud cases, while public sector banks experienced the greatest financial repercussions.
“In terms of the number of frauds, card and internet frauds were predominant across all bank categories in 2023-24,” it noted.
When discussing enforcement measures, the total penalties imposed on banks reached Rs 86.1 crore in 2023-24.
“The instances of penalties applied to regulated entities (REs) increased during 2023-24 across all bank categories, with the exception of FBs and small financial banks (SFBs). The total penalty sum more than doubled in 2023-24, primarily driven by public and private sector banks. The penalties on co-operative banks decreased during the year, although the number of penalty instances rose,” the RBI report stated.
Frauds pose various challenges to the financial system, including reputational risk, operational risk, business risk, and a decline in customer confidence, which can have implications for financial stability.
“Moving forward, there is a persistent necessity for banks to enhance their risk management standards, IT governance structures, and customer onboarding and transaction monitoring systems to mitigate unscrupulous activities, including suspicious and unusual transactions,” the RBI emphasized.
The central bank is also developing a public database of digital lending applications to assist customers in verifying the authenticity of these services.
