The overall number of frauds, including those related to loan accounts and digital payments, jumped by three times in FY25, primarily due to reclassification of 122 cases as per a Supreme Court order, the Reserve Bank said on Thursday.
Illustration: Uttam Ghosh/Rediff
The fraud value jumped to Rs 36,014 crore in FY25, up from Rs 12,230 crore in the previous fiscal year, while the number of fraud cases went down to 23,953 in FY25 from 36,060 in FY24.
“The increase in the amount involved in the total frauds reported during 2024-25 over 2023-24 was mainly due to removal of fraud classification in 122 cases amounting to Rs 18,674 crore reported during previous financial years and reporting afresh during the current financial year after re-examination and ensuring compliance with the judgement of the Hon’ble Supreme Court dated March 27, 2023,” the report explained.
Frauds have occurred predominantly in the category of digital payments, including card and internet, in terms of number, and primarily in the loan portfolio or advances in terms of value, it said.
Private sector banks (PSBs) account for nearly 60 per cent of the fraud cases by numbers, while PSBs’ share in terms of value stands at over 71 per cent as of end-FY25, it said.
“While card/internet frauds contributed maximum to the number of frauds reported by private sector banks, frauds in public sector banks were mainly in loan portfolio,” it said.
Frauds related to advances accounted for over 33 per cent of the instances by numbers and over 92 per cent of the value, it said.
There were 13,516 frauds by number under the card and internet frauds category as of end-FY25, which was 56.5 per cent of the 23,953 frauds.
The annual report said the data pertains to frauds of Rs 1 lakh and above reported in FY25, and the figures are subject to change as entities may revise them.
“Amounts involved reported do not reflect the amount of loss incurred. Depending on recoveries, the loss incurred gets reduced.
“Further, the entire amount involved is not necessarily diverted,” it added.
To combat the increasing instances of fraud in digital payments, the Reserve Bank has proposed to introduce an exclusive internet domain for the banks in India in the form of ‘bank.in’ and ‘fin.in’ for non-banks, it said.
The initiative will help enhance trust in digital banking and payment services and aid in streamlining secure financial services.
The exclusive internet domains would also help identify cybersecurity threats and malicious activities like phishing and would also considerably reduce instances of financial loss to the general public, the report said.
The Institute for Development and Research in Banking Technology (IDRBT) will act as the exclusive registrar for this initiative, and the registration process for banks will be initiated in FY26, the annual report said.
