The number of fraud cases reported by private banks accounted for 66.2% of the total cases whereas.
According to a recent report by Reserve Bank Of India , the first half of the financial year 2023, Indian banks experienced a significant upswing in digital fraud, with a total of 12,069 reported cases related to cards and internet transactions. This marked a staggering seven-fold increase from the comparatively lower ₹87 crore reported during the same period in the previous fiscal year, according to the Reserve Bank of India’s Trends and Progress in Banking 2023 report.
While the number of digital fraud cases soared, the overall count of reported frauds by lenders reached 14,483, amounting to ₹2,642 crore. Interestingly, this overall figure represented the lowest in six years. The report pointed out that, based on the occurrence of frauds, the average amount involved in these incidents declined throughout 2022-23, with a notable concentration observed in card or internet-related fraud.
Private banks took the lead in reporting fraud cases, accounting for 66.2% of the total reported incidents. However, when it came to the amount involved, public sector banks had a larger share. Public sector banks primarily reported frauds related to advances, while private banks were more frequently associated with card, internet, and cash-related cases.
Despite the surge in reported fraud cases, the Reserve Bank of India levied fewer penalties on lenders in the fiscal year 2023 compared to the preceding fiscal year. For instance, public sector banks faced a reduced penalty of ₹3.7 crore for seven instances of non-compliance, a significant drop from the ₹17.6 crore penalty imposed for 13 instances in FY22.
In contrast, private banks incurred higher penalties in FY23, with a total of ₹12.2 crore imposed for seven instances of regulatory violations. Cooperative banks bore the brunt of regulatory penalties, facing the highest penalty of ₹14 crore for 176 violations. This shift in the regulatory landscape suggests a heightened focus on penalising non-compliance and violations within the banking sector, underscoring the authorities’ commitment to maintaining the integrity of the financial system.
