MUMBAI: India’s central bank says the number of reported banking frauds fell in 2024–25, even as the money involved rose sharply—an outcome shaped by legacy cases, shifting digital risks and a renewed regulatory focus on customer protection.
A Diverging Pattern in Fraud Numbers and Value
In its latest Report on Trend and Progress of Banking in India 2024–25, the Reserve Bank of India described a year marked by an apparent contradiction. Based on the date of reporting by banks, the total number of fraud cases declined during the year. At the same time, the overall amount involved increased.
The rise in value, the central bank said, was largely driven by the re-examination and fresh reporting of 122 fraud cases amounting to ₹18,336 crore, following compliance with a Supreme Court judgment dated March 27, 2023. These cases, linked to earlier periods, reshaped the aggregate figures even as newer frauds showed moderation in volume.
The RBI noted that fraud continues to expose banks to reputational, operational and business risks, while also eroding customer trust—an underlying concern that framed much of the report’s assessment.
Private and Public Banks, Different Risk Profiles
The report highlighted a clear contrast between private and state-owned banks. In private sector banks, card and internet-related frauds accounted for the largest share by number of cases in 2024–25. However, when measured by value, fraud related to advances—primarily loans—dominated.
State-owned banks, by contrast, reported the highest share of advances-related fraud both in terms of the number of cases and the amounts involved. Overall, private sector banks accounted for 59.3 per cent of the total number of frauds reported during the year, while public sector banks accounted for 70.7 per cent of the total amount involved.
Digital Frauds Dominate by Volume
When assessed by the date of occurrence, digital channels emerged as the most frequent source of fraud. During 2024–25, card and internet-based frauds made up 66.8 per cent of total cases by number. In contrast, advances-related frauds accounted for 33.1 per cent of the total amount involved, reflecting their typically higher ticket size.
The central bank observed that the expanding scale of digital transactions and the emergence of new payment channels have altered the fraud landscape. While individual losses in digital frauds may be smaller, their frequency has made them a persistent challenge for banks and regulators alike.
Regulatory Response and New Safeguards
Against this backdrop, the RBI said it is reviewing its 2017 instructions on the limited liability of customers in unauthorised electronic banking transactions, citing major changes in the banking environment and evolving fraud patterns. The review is expected to strengthen customer safeguards.
The report also outlined several technology-led initiatives. MuleHunter.ai, an artificial-intelligence tool designed to identify and flag potential mule accounts through system-wide learning, had been implemented in 23 banks as of December 17, 2025. Another initiative, the Digital Payments Intelligence Platform, aims to use AI to flag risky transactions and enable intelligence-sharing for fraud detection and prevention.
Beyond technology, the RBI said it plans to issue harmonised instructions on conduct-related matters involving recovery agents and loan recovery, and to introduce comprehensive norms on advertising, marketing and sales to prevent mis-selling of financial products.
