In its recently published annual report for fiscal 2024–25, the Reserve Bank of India (RBI) issued a stern warning over the alarming spike in banking frauds, signalling a deepening threat to financial stability.
The report states that the total value of bank frauds surged to ₹36,014 crore in FY 2024–25, nearly three times the ₹12,230 crore recorded in FY 2023–24. This dramatic rise occurred even as the number of reported fraud cases fell by around 34%, from 36,060 to 23,953, suggesting that although fewer in count, the frauds were substantially larger in scale
Loan Frauds Dominate in Value; Private Banks Lead in Cases
Further analysis reveals that loan-related frauds were responsible for a staggering ₹33,148 crore—approximately 92% of total fraud value—marking a steep increase from ₹10,072 crore a year earlier. In contrast, although digital and card-based frauds accounted for 56% of all reported incidents (13,516 cases), their financial impact was relatively minor, amounting to only ₹520 crore.
Private-sector banks logged the highest number of fraud cases, accounting for nearly 60% of all incidents (14,233 cases). However, public-sector banks were hit hardest financially, bearing 71.3% of the total fraud amount—₹25,667 crore—despite reporting fewer cases.
Number of Frauds
- Private Sector Banks reported the highest number of frauds each year, peaking at 24,207 in FY 2023–24.
- Public Sector Banks saw a sharp spike in FY 2023–24 with over 7,460 cases — more than double from the previous year.
- Small Finance Banks have shown consistent growth in fraud numbers, indicating rising vulnerabilities.
Amount Involved
- Public Sector Banks dominate the chart in terms of monetary losses, hitting ₹25,667 crore in FY 2024–25 alone — nearly triple from FY 2023–24.
- In contrast, despite their high number of frauds, Private Sector Banks’ monetary losses remain moderate, showing better control per fraud instance.
- Foreign Banks and Payments Banks have minimal monetary losses, although some increase is noticeable.
RBI Urges Systemic Fixes and Tech-Driven Vigilance
The RBI attributes the surge in fraud value to several factors: the reclassification of 122 previously unreported cases (amounting to ₹18,674 crore) after higher court mandates, in conjunction with an actual increase in large-scale loan frauds.
To counter these challenges, the RBI has urged banks to strengthen real-time fraud monitoring systems, upgrade cyber-security defences, and enhance board-level oversight and staff accountability. It also recommended closer cooperation with law enforcement and improved fraud-disclosure practices. Additionally, AI-powered tools are being deployed to detect suspicious transactions, particularly mule accounts used for money laundering.
About the Author – Anirudh Mittal is a B.Sc. LL.B. (Hons.) student at National Forensic Sciences University, Gandhinagar, with a keen interest in corporate law and tech-driven legal change.