Even as digital banking becomes India’s new normal, a fresh Reserve Bank of India report reveals a disturbing trend while the number of reported fraud cases has declined, the amount of money lost has skyrocketed. In FY 2024–25, over ₹36,000 crore was siphoned off through nearly 24,000 fraud cases, shaking public confidence in the country’s banking system.
The RBI attributes the spike in reported fraud value partly to the reclassification of older high-value cases, following a Supreme Court ruling dated March 27, 2023. These cases, involving ₹18,674 crore in 122 incidents, were reopened and added to the 2024–25 figures, skewing comparisons but highlighting the scale of historical fraud that remains unresolved.
Private Banks Lead in Fraud Volume, Public Banks in Fraud Value
According to the data, private sector banks reported the highest number of fraud cases—14,233 in total—accounting for nearly 60% of all incidents. However, it was India’s public sector banks that bore the brunt of the financial damage, accounting for ₹25,667 crore (a staggering 71.3% of total value lost).
This difference points to the types of fraud prevailing in each sector. While private banks grappled mostly with digital and card frauds, public banks were victims of large-scale loan-related frauds, some of which involved collusion at multiple levels.
- Private Banks: ₹10,088 crore lost across 14,233 cases
- Public Banks: ₹25,667 crore lost across 6,935 cases
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Digital Payments and Loan Segments: Weakest Links in Bank Security
The report underscores that digital payment channels especially card and internet banking remain major areas of concern, with 13,516 cases falling under this category. These represent 56.5% of the total fraud cases but only a fraction of the overall value lost.
In contrast, loan frauds, particularly in public banks, were fewer in number but devastating in value. Over 92% of the total fraud amount in public banks stemmed from fraudulent loans, often tied to manipulated documentation, shell companies, and insider complicity.
The RBI reiterated that the fraud data pertains to cases involving losses above ₹1 lakh and cautioned that several of these may have occurred in previous years but were reported only during the current fiscal.
Systemic Gaps and Urgent Need for Reform
The data has reignited concerns over the resilience of India’s banking infrastructure in the face of evolving fraud tactics. Experts believe that banks, especially in the public sector, need to adopt stricter due diligence, enhance digital risk frameworks, and invest in advanced fraud detection systems.
Regulators are urging both private and public banks to strengthen cyber vigilance, increase transparency in loan disbursals, and expedite internal investigations. The massive ₹36,000+ crore fraud figure serves as a grim reminder that while India’s banking ecosystem is digitally evolving, its security architecture must evolve even faster to prevent erosion of public trust.