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Banks (Finance)

Bank Fraud in India: A Rising Concern

Strategic Insights

— 1 min read

The Reserve Bank of India's 2024-25 annual report highlights a disturbing trend in bank frauds, with the value of such cases rising sharply from Rs 12,230 crore in 2023-24 to Rs 36,014 crore in 2024-25, a threefold increase in just one year. This increase is attributed to the fresh registration of fraud in 122 old cases, despite a decline in the number of cases registered from 36,060 to 23,953. Public sector banks, despite reporting fewer cases, still accounted for a staggering 71.3% of the total money lost, primarily due to loan-related frauds.

Key Takeaways:

  • Bank frauds in India rose from Rs 12,230 crore in 2023-24 to Rs 36,014 crore in 2024-25, a threefold increase in just one year.
  • Loan-related frauds dominate the sphere of transgression, accounting for 92% of the total money lost to frauds across all banks.
  • Public sector banks accounted for 71.3% of the total money lost, primarily due to loan-related frauds.
  • Private banks logged the highest number of cases registered – 59.4% – mainly via digital payments via credit/debit cards and internet banking.
  • The RBI is testing an Artificial Intelligence-powered tool to spot mule accounts used for money laundering in near real-time.
  • An effective anti-corruption edifice targeting personnel with greasy fingers must be erected to prevent corruption and protect depositors and investors.
  • The impact of banking frauds transcends financial loss, eroding public trust in banks.

Statistics:

  • Bank frauds in India rose from Rs 12,230 crore in 2023-24 to Rs 36,014 crore in 2024-25, a 192.50% increase.
  • The number of cases registered fell from 36,060 to 23,953, a decline of 33.66%.
  • Public sector banks accounted for 71.3% of the total money lost, while private banks accounted for 59.4% of the cases registered.
  • Loan-related frauds accounted for 92% of the total money lost to frauds across all banks.
  • The RBI is testing an Artificial Intelligence-powered tool to spot mule accounts used for money laundering.

Sources:

  • Reserve Bank of India's 2024-25 annual report.

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