Value of frauds in banking transactions spiked 10 times in 10 years, shows RBI data

A total of 9,053 cases of frauds were reported in various banking operations amounting to ₹45,598 core in 2021-22, shows the RBI data on trends and progress of banking in India, shows the latest RBI data on trends and progress of banking in India.

This is ten times the 2011-12 data when total amount of frauds amounted to ₹4,497 crore out of 4,091 cases.

The data refer to the frauds of ₹one lakh and above.

Most of these frauds in banking transactions relate to ‘advances’. Out of ₹45,598 crore, frauds related to advances are valued at ₹43,512 crore and deposit-related frauds amount to ₹493 crore while cheque/demand drafts related frauds are valued at ₹158 crore.

Interestingly, the same trend was evident a decade ago i.e., in 2011-12.

Out of the frauds amounting to ₹4,497 crore, a vast majority of them (valued at ₹3,552 crore) relate to advances, while frauds related to deposits and cheque/demand drafts related frauds are valued at ₹219 crore and 40 crore, respectively, shows the RBI data.

(Source: RBI)

However, it is vital to note that the total value of frauds has seen a decline in the past two years. In 2020-21, the value of frauds declined from ₹1,66,576 crore in 2019-2020 to ₹1,18,417 crore in 2020-21 and further to ₹45,598 crore the following year.

What to do in case of fraud?

If you happen to notice any transaction that was not carried out by you or is a fraud, it is incumbent upon you to immediately inform the bank.

The RBI says that ‘If you have suffered a loss due to unauthorized electronic transactions, your liability may be limited, but also zero, if you notify your bank immediately.’

So, if the fraud victim informs the bank within a stipulated amount of time (i.e., 3 days) of financial fraud, it is the bank's responsibility to prove that the customer did not fall prey to fraud.

Earlier the onus was on the customer to prove that s/he was the victim.

If the fraud is reported and proven, the bank has to pay the entire amount to the customer. Whenever a customer makes an online payment, there are intermediary platforms such as payee bank, payer bank, payment gateway.

The entire process has to be encrypted and no data of the customer should be stored in the process.

So, during this process if a fraud takes place, the bank is meant to refund the amount to the customer.