Fraud Surge in FY25: Digital Payments and Loan Advances Under Scrutiny

The Reserve Bank reported a threefold increase in fraud cases in FY25, due to reclassification following a Supreme Court order. While the value of frauds rose to Rs 36,014 crore, the number of cases decreased. Digital payments were a key category, with private sector banks heavily impacted.

In a significant development, the Reserve Bank announced a sharp increase in the number of frauds during FY25. The situation has escalated, primarily due to the reclassification of 122 cases, which follows a recent Supreme Court directive. As a result, the total fraud value has skyrocketed to Rs 36,014 crore, up from Rs 12,230 crore the previous year, even as the number of fraud cases itself has decreased.

The digital payments sector, including card and internet transactions, has seen the largest number of these fraud cases. However, the loan portfolio represents the majority in terms of value. Private sector banks, bearing the brunt of these cases, account for 60% in number, while public sector banks dominate in terms of fraudulent transaction value.

The Reserve Bank plans to implement new cybersecurity measures by introducing exclusive internet domains, 'bank.in' and 'fin.in', to mitigate digital payment frauds. This initiative aims to improve trust in the financial system, reduce financial losses, and identify cybersecurity threats, with the IDRBT acting as the exclusive registrar by FY26.

(With inputs from agencies.)