Bank frauds more than double to 36,066 in FY24

Banks have reported 36,066 number of frauds in FY24, more than double of 13,537 in FY23, according to data released by the Reserve Bank of India (RBI). The amount involved in the number of frauds, however, was at a decadal low or ₹13,175 crore in FY24, the report said.

So far in H1FY25, lenders have reported a total of 18,461 frauds amounting to ₹21,367 crore, the data showed. 

“Based on the data 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,” the report said.

While private lenders reported the maximum number of frauds, PSBs suffered more in terms of amount. 

The regulator also penalised lenders more for regulatory violations in last fiscal. There were 16 instances of imposition of penalties on public sector banks amounting to ₹23.7 crore, sharply higher than ₹3.6 crore in FY23. A total of 12 monetary penalties were imposed on private banks amounting to ₹24.9 crore in FY24, higher than ₹12.2 crore in previous fiscal. 

“While many cases of digital frauds result from social engineering attacks on customers, there is also a rapid increase in the use of mule bank accounts to perpetrate such frauds. This exposes banks not only to serious financial and operational risks, but also to reputational risks. Banks, therefore, need to strengthen their customer onboarding and transaction monitoring systems to monitor unscrupulous activities, the RBI said. 

“This also requires effective co-ordination with the law enforcement agencies so that the concerns occurring at a systemic level are detected and curbed in time. The Reserve Bank is working with banks and LEAs to strengthen transaction monitoring systems and ensure sharing of best practices for control of mule accounts and prevention of digital frauds,” it added.