- Friday, December 27, 2024
The share of internet and card frauds stood at 44.7 per cent of the total in terms of amount and 85.3 per cent in terms of number of cases
By: India Weekly
THE NUMBER of bank frauds witnessed a significant on-year increase in the first half of the current fiscal to 18,461 cases and the amount involved jumped more than eight-fold to ₹213.67 billion (£2 bn), according to RBI data released on Thursday.
The Reserve Bank of India has released the Report on Trend and Progress of Banking in India 2023-24 which presents the performance of the banking sector, including commercial banks, co-operative banks and non-banking financial institutions, during 2023-24 and 2024-25 so far.
The report said during the comparative period of the last financial there were 14,480 cases involving ₹26.23 billion (£246.04m).
It further said frauds present multiple challenges for the financial system in the form of reputational risk, operational risk, business risk and erosion of customer confidence with financial stability implications.
Regarding 2023-24 fiscal as a whole, the RBI said that based on date of reporting by banks, the amount involved in frauds was the lowest in a decade, while the average value was the lowest in 16 years.
Based on the date of occurrence of frauds, in 2023-24, the share of internet and card frauds in the total stood at 44.7 per cent in terms of amount and 85.3 per cent in terms of number of cases.
In 2023-24, the number of fraud cases reported by private sector banks (PVBs) accounted for 67.1 per cent of the total.
In terms of amount involved, however, public sector banks (PSBs) had the highest share of card and internet frauds was highest for all bank groups in 2023-24.
Instances of penalty imposed on regulated entities (REs) increased during 2023-24 across all bank groups, except foreign banks and small finance banks.
The report also said that several reports indicate the continued presence of unscrupulous players in the digital lending space, who falsely claim association with regulated entities.
While many cases of digital fraud result from social engineering attacks on customers, there is also a rapid increase in the use of mule bank accounts to perpetrate such frauds, RBI said.
“Banks, therefore, need to strengthen their customer onboarding and transaction monitoring systems to monitor unscrupulous activities,” the RBI said.
