Yet, the total amount implicated in bank frauds dropped by 46.7% YoY in FY24 to 13,930 crore, according to the RBI’s Annual Report.
According to the Reserve Bank of India’s (RBI) annual report released on May 30, the number of bank frauds surged 166% year-on-year to 36,075 in FY23-24, significantly higher than the 13,564 reported in FY23. However, the total amount implicated in bank frauds plummeted 46.7% YoY to Rs 13,930 crore in FY23-24 from Rs 26,127 crore in FY23. The annual report noted that while private sector banks reported the highest number of frauds, public sector banks contributed the most to the total fraud amount. Furthermore, frauds were predominantly observed in digital payments (card/internet), while the loan portfolio (advances category) accounted for the majority of frauds in terms of value.
Insights from RBI’s Annual Report: Trends and Challenges in Bank Fraud Detection
The report highlighted that while private sector banks saw small value card/internet frauds contributing most to reported frauds, public sector banks primarily faced frauds in their loan portfolios.
An analysis of fraud vintage between 2022-23 and 2023-24 reveals a significant delay between fraud occurrence and detection.
RBI’s annual report indicated that 94.0% of frauds reported in 2022-23 were from previous financial years in terms of value. Similarly, 89.2% of frauds reported in 2023-24 by value occurred in previous financial years.
An assessment spanning three years finds private sector banks reporting more frauds, while public sector banks consistently account for the highest total fraud amount.
Digital payments, particularly involving cards and internet transactions, constitute the majority of fraud cases in both frequency and monetary value, with frauds in the loan portfolio being the main source of financial loss.
Private sector banks report mainly small-value card and internet transaction frauds, while public sector banks primarily encounter frauds in their loan portfolios, according to RBI’s analysis.
Analysis of reported frauds between 2022-23 and 2023-24 reveals a significant delay between occurrence and detection.
Regarding finances, RBI’s annual report discloses that 94% of fraud value reported in 2022-23 stems from incidents in previous financial years, while 89.2% of fraud value reported in 2023-24 is linked to previous financial year occurrences.
The RBI report underscores a notable increase in bank fraud occurrences, with incidents soaring by 166% to 36,075 in FY24 from 13,564 in the prior year, signaling a mounting challenge in the banking sector’s anti-fraud efforts.
In contrast, despite the surge in fraud cases, the aggregate value implicated in these incidents has substantially decreased by 46.7% to Rs 13,930 crore in FY24 from Rs 26,127 crore in FY23, suggesting a potential reduction in the financial impact per case.
Analyzing fraud distribution among bank types over the last three years reveals private sector banks reporting the highest number of frauds, yet public sector banks bear the heaviest burden in terms of value affected, indicating larger sums involved in fewer, but more significant, fraud cases in these banks.
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