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Indian Banks Lost a Whopping Rs 5.3 Lakh Crore to Frauds in a Decade!

– Indian Banks report Rs 5.3 lakh crore in frauds over 10 years.
– Maharashtra leads in bank fraud cases; RBI takes action.



Your Bank Account Could Be Next! Indian Banks Report Massive Rs 5.3 Lakh Crore Fraud in 10 Years.
Your Bank Account Could Be Next! Indian Banks Report Massive Rs 5.3 Lakh Crore Fraud in 10 Years.

NEW DELHI: Indian banks have witnessed a concerning surge in fraudulent activities, with a staggering Rs 5.3 lakh crore worth of frauds reported in the last ten years (2013-14 to 2022-23), according to data from the Reserve Bank of India (RBI) obtained through a Right To Information (RTI) application filed by Moneycontrol.

The data reveals a worrying trend, with both private and public sector banks collectively reporting a total of 4,62,733 fraud cases during the period. Maharashtra emerged as the state with the highest number of reported frauds, followed by Delhi, Haryana, Tamil Nadu, and Uttar Pradesh. Other states like Karnataka, Gujarat, Telangana, West Bengal, and Rajasthan also saw a significant number of bank frauds, ranging from 8,000 to 12,000, over the past decade.

Experts attribute this rise in frauds to the growing adoption of digital banking services.  The significant jump in the use of digital banking has led to customers relying more on bank apps for various services, consequently leading to an increase in fraud complaints.

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The analysis of RBI’s annual reports indicates that a majority of these frauds are related to advances (loans), card transactions, and digital/internet banking. For instance, in the financial year 2022-23 (FY23), banks reported the highest number of frauds (6,659 out of 13,530) through cards and internet banking. Frauds related to advances were also substantial at 4,109 in FY23. This trend has been consistent over the past few years, with a gradual rise in digital banking frauds.

Description Number
Total amount of bank frauds (2013-14 to 2022-23) Rs 5.3 lakh crore
Total number of fraud cases reported 4,62,733
Fraud cases through cards and internet banking (FY23) 6,659
Frauds against advances (FY23) 4,109
Total fraud cases reported (FY23) 13,530
Frauds against advances (FY22) 3,833
Fraud cases through cards and internet (FY22) 3,596
Total fraud cases reported (FY22) 9,097
Frauds against advances (FY21) 3,476
Fraud cases through cards and internet (FY21) 2,545
Total fraud cases reported (FY21) 7,338

The RBI has actively cautioned the public against falling prey to scams disguised as KYC (Know Your Customer) updates. These frauds typically involve unsolicited calls, SMS, or emails tricking customers into revealing personal information.

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To combat this growing threat, banks are continuously working on strengthening their digital security infrastructure. This includes investments in new technologies like Artificial Intelligence (AI) and Machine Learning (ML) to enhance services and minimize fraud instances. Additionally, the implementation of the data privacy law is expected to further tighten the noose around online fraudsters.

While some experts acknowledges the rise in frauds but emphasizes the increasing focus on credit risk assessment by banks. While frauds have been on the rise, banks are actively focusing on strengthening their credit risk assessment processes.

The RBI and banks are taking multi-pronged approaches to address this critical issue. Educating the public about online frauds, investing in advanced security measures, and a sharper focus on risk management hold the key to mitigating these financial crimes.

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