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Journalism of Courage
Based on the date of reporting, the average amount of involved in frauds declined by 85 per cent during the first half (H1) of financial year 2023-24 with the number of frauds rising sharply by 624 per cent in the card and internet segment, the Reserve Bank of India (RBI) said in a report.
The number of frauds in the card and internet segment jumped to 12,069 cases involving Rs 630 crore during H1FY24 as against 2,321 cases for just Rs 87 crore in the same period of last year, as per RBI’s report on trend and progress of banking. Overall, banks reported 14,483 cases of fraud involving Rs 2,642 crore during the period, down from 5,396 cases involving Rs 17,685 crore frauds.
On the other hand, based on the date of occurrence of frauds, the average amount involved in frauds declined during the first half of 2023-24, with the number of cases concentrated in card or internet related frauds.
Banks reported 8,363 fraud cases involving Rs 377 crore during the April-September 2023-24 period as against 13,242 cases involving Rs 2,146 crore in full fiscal of 2022-23, according to the Reserve Bank’s Report on trend and progress of banking.
According to the RBI, most of the frauds happened in card and internet segment. There were 7,382 fraud cases involving Rs 285 crore in card and internet segment during April-September of this fiscal as against 9,812 cases for Rs 520 crore in the same period of previous year based on the date of occurrence of frauds.
There was a sharp fall in frauds relating to advances from Rs 1,094 crore last year to Rs 26 crore in the first half of current fiscal.
The number of fraud cases reported by private banks accounted for 66.2 per cent of the total. In terms of amount involved, PSU banks had a higher share. While the majority of the frauds in PSBs were related to advances, PVBs accounted for a majority of card/ internet and cash-related cases, the RBI said.
According to the report, frauds lead to reputational, operational and business risk for banks and undermine customers’ trust in the banking system with financial stability implications. During 2022-23, the total amount of frauds reported by banks declined to a six-year low while the average amount involved in frauds was the lowest in a decade. In H1:2023-24, although the number of frauds reported rose over the corresponding period a year ago, the amount involved was only 14.9 per cent of the previous year’s amount.
The RBI said new technologies enhance the efficiency and effectiveness of banking operations. “With this, however, the risks of fraud and data breaches have also increased. Concerted efforts by all stakeholders including regulators, banks and customers are required to protect the system from these threats. On its part, the Reserve Bank has been striving to update the regulations to protect customers while ensuring that innovations are not stifled,” it said.
