Online fraud cases rise by 708% in two years, amount increased by 145% : RBI report

The number of fraud cases in the banking sector increased by nearly 300% in the last two years to 36,075 cases in the financial year 2023-24 (FY24). In contrast to the increasing number of fraud cases, the amount involved in fraud fell to ₹13,930 crore in FY24 from ₹45,358 crore in FY22, said the Reserve Bank of India in its annual report on Thursday. 

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According to the central bank's report, 67% of fraud cases reported in FY24 were from private sector banks, while 75% of the total fraud amount was reported by public sector banks. The percentage of fraud amount reported by private lenders was 22.8% in FY24. 

Online fraud cases on the rise

The annual report highlighted the significant rise in online fraud cases over the last two years. According to the report, online fraud cases increased by 708% in the last two years to 29,082. The rising number of fraud cases coincides with increased fraud amounts via Internet banking/cards. In two years, the amount of money duped by fraudsters online increased by 145% to ₹1,457 crore. The growing number of fraud cases highlights the need for the central bank to increase regulation in the area. 

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Max fraud amount in loan portfolio in FY24

Although a large number of fraud cases were reported from internet/cards category, the maximum amount involved in fraud cases came from loan portfolios. Public Sector Banks outpaced private lenders in the category. Of the total fraud amount of ₹13,930 crore reported in FY24, 84% came from advances, i.e. loan portfolio. 

Significant time-lag in fraud detection

Another major roadblock identified by the central bank in tackling the rising number of fraud cases was a significant time lag in the detection of fraud cases. The analysis of the vintage of frauds reported during FY23 and FY24 highlighted a significant gap between the date of occurrence of fraud and its detection.

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Private lenders reported max no. of fraud cases; public lenders contribute max to fraud amount

The private sector banks reported a maximum number of frauds, whereas public sector bank continued to contribute to maximum to the fraud amount.

“Frauds have occurred predominantly in the category of digital payments (card/internet), in terms of number. In terms of value, frauds have been reported primarily in the loan portfolio (advances category),” said the Annual Report for 2023-24.