The RBI report highlighted plans to enhance security and improve the payment experience by exploring real-time payee name validation before funds are transferred
The number of fraud cases in the banking sector surged to 36,075 in the 2023-24 financial year, up from 13,564 the previous year, according to the Reserve Bank of India’s (RBI) annual report. Despite the increase in the number of frauds, the total amount involved dropped significantly by 46.7% to ₹13,930 crore, down from ₹26,127 crore a year earlier.
The RBI report highlighted plans to enhance security and improve the payment experience by exploring real-time payee name validation before funds are transferred. This initiative aligns with the recently enacted ‘The Digital Personal Data Protection Act, 2023’.
Analysing bank group-wise fraud cases over the past three years, the report found that private sector banks reported the highest number of frauds. However, public sector banks accounted for the largest amount of money lost to fraud.
“Frauds have occurred predominantly in the category of digital payments (card/internet), in terms of number. In terms of value, frauds have been reported primarily in the loan portfolio (advances category),” the report stated.
In private sector banks, most fraud cases involved small value card or internet transactions. Conversely, in public sector banks, frauds were mainly linked to loan portfolios.
Additionally, the report noted a significant delay between when a fraud occurs and when it is detected. In 2022-23, 94 per cent of the total value of reported frauds were from previous financial years. This trend continued in 2023-24, with 89.2 per cent of the reported fraud value originating from earlier years.