NEW DELHI: Despite a decline in the number of reported bank frauds in 2024-25, the total value involved in these frauds has almost trebled compared to the previous year, according to the Reserve Bank of India’s (RBI) Annual Report. The increase is largely attributed to the reclassification and fresh reporting of earlier cases following a Supreme Court ruling on due process.
A total of 23,953 frauds were reported during the year, down from 36,060 in 2023-24. However, the amount involved jumped sharply to ₹36,014 crore, up from ₹12,230 crore. This surge is primarily due to the reinstatement of 122 previously withdrawn cases amounting to ₹18,674 crore, after re-examination in line with the Supreme Court’s March 2023 judgment mandating adherence to the principles of natural justice before designating frauds.
Private sector banks accounted for the highest number of frauds—14,233 cases—but their share in the total amount was only 28%. In contrast, public sector banks, with 6,935 frauds, were responsible for 71% of the value involved, reflecting the larger size and complexity of their loan books.
Foreign banks, small finance banks, and payment banks together made up less than 1% of the total fraud value.
The RBI noted that loan-related frauds (advances) accounted for 92% of the value, although they made up just 33% of the cases. Conversely, digital payment frauds (card/internet) were the most frequent in number, comprising 56.5% of total cases, but only 1.4% of the value. Deposit, forex, and inter-branch account frauds remained relatively minor in scale.
In response to these trends, the RBI has introduced new fraud risk management directions. Key measures include reinforcing early warning systems, stricter red-flagging of accounts, and mandatory observance of natural justice principles. A new supervisory analytics group is also leveraging AI and machine learning to develop fraud vulnerability and borrower risk models.
Additionally, urban cooperative banks have been instructed to undergo cybersecurity audits by CERT-In empanelled firms and implement stronger digital payment safeguards.
For 2025-26, the RBI plans to roll out real-time digital dashboards to monitor frauds and digital service uptime, enhance cyber resilience in financial entities, and issue fresh guidelines on digital forensic readiness.
The central bank’s intensified focus on both systemic supervision and technological intervention underlines a growing recognition: the battle against banking fraud is no longer just about catching culprits, but about building resilient, real-time defences.
