Srinagar: Jammu and Kashmir witnessed a sharp rise in the value of banking and financial fraud during the 2025–26 financial year, despite a continued decline in the number of reported cases. According to official data presented in Parliament, the Union Territory recorded 103 financial fraud cases involving ₹193.49 crore during FY26. However, banks were able to recover only ₹6.92 crore from these frauds. The figures indicate that while the number of fraud cases has steadily decreased over the past three years, the financial impact of individual frauds has increased significantly, highlighting the growing scale and sophistication of financial crimes.
In a written reply to a Lok Sabha question, the government, citing data from the Reserve Bank of India (RBI), said Jammu and Kashmir recorded 467 bank fraud cases involving ₹47.55 crore in FY2023–24. In FY2024–25, the number of cases declined to 298, but the amount involved rose to ₹81.27 crore. During FY2025–26, reported cases further dropped to 103, while the value of frauds more than doubled to ₹193.49 crore, marking the highest amount reported during the three-year period.
The recovery figures show that banks recovered ₹3.23 crore in FY2023–24, ₹2.65 crore in FY2024–25, and ₹6.92 crore in FY2025–26. Although the recovered amount increased in the latest financial year, it remains a small fraction of the total losses. Experts note that recovering money in large financial frauds is often difficult because funds are rapidly routed through multiple accounts, intermediaries, and financial channels before investigators can intervene.
In neighbouring Ladakh, financial fraud remained comparatively limited. Government data shows 18 fraud cases involving approximately ₹0.07 crore in FY2023–24 and 13 cases involving around ₹0.03 crore in FY2024–25. During FY2025–26, only eight cases were reported. RBI records show zero fraud value and zero recovery for Ladakh during the latest financial year.
The government clarified that the statistics relate to frauds reported by Scheduled Commercial Banks and All India Financial Institutions, excluding Regional Rural Banks. It also stated that the RBI does not maintain separate data on the total amount frozen or refunded to victims following fraud investigations.
Renowned cybercrime expert and former IPS officer Prof. Triveni Singh said modern financial fraud networks increasingly rely on money mule accounts, synthetic identities, digital payment platforms, and layered banking transactions to move stolen funds rapidly, making recovery significantly more challenging. He stressed the need for stronger artificial intelligence-based monitoring, real-time transaction analysis, and faster information sharing among financial institutions and law enforcement agencies to detect suspicious transactions at an early stage.
According to the Ministry of Finance, banks are required under the RBI’s Master Directions on Fraud Risk Management to immediately report fraud cases to the appropriate law enforcement agencies, including State or Union Territory police, the Serious Fraud Investigation Office (SFIO), and the Central Bureau of Investigation (CBI) wherever applicable. The government said there is no fixed timeline for recovering fraud proceeds because each case differs in complexity and often involves parallel proceedings before multiple investigative agencies, tribunals, and courts.
The government further stated that complaints relating to cyber-enabled financial fraud filed through the National Cyber Crime Reporting Portal or the 1930 helpline are integrated with the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS). The platform enables coordination between police, banks, and financial intermediaries to trace money trails and place immediate liens on suspected fraudulent funds. Money frozen through the system is subsequently returned to victims through the Money Restoration Module (MRM).
In addition, the RBI has established the Central Fraud Registry and introduced the AI-powered MuleHunter platform to identify money mule accounts. The government also highlighted the role of the Indian Digital Payment Intelligence Corporation (IDPIC), which uses artificial intelligence, machine learning, and big data analytics to detect, prevent, and analyse fraud across India’s digital payment ecosystem in real time. Officials said strengthening technological surveillance, accelerating enforcement, and improving coordination among agencies remain key priorities for enhancing fraud prevention and increasing recovery rates in the future.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
