The amount involved in frauds related to loan accounts saw a sharp decline in FY25, according to Reserve Bank of India (RBI) data. At the same time, the number of frauds related to credit/debit cards and internet banking rose over five times in FY25.
Following a sharp rise in the Indian corporate sector’s large-value non-performing loans in the previous decades, banks have become cautious in lending to companies while tightening credit appraisal processes.
Banks have increased their focus on retail loans and beefed up digital banking. In the past five years, private sector banks reported more frauds, while public sector banks contributed the most to the fraud amount. This came as private banks were more aggressive in retail lending.
The RBI said data for FY25 includes 122 fraud cases amounting to ₹18,674 crore, which were reclassified and reported afresh in the current year after re-examination and ensuring compliance with the Supreme Court’s judgment dated March 27, 2023. This was the reason the amount for fraud increased in FY25 after a continuous decline in the previous four years.
According to the RBI, classification of fraud is mainly based on the provisions of the Indian Penal Code (IPC). Some areas of fraud include misappropriation and criminal breach of trust, fraudulent encashment through forged instruments, manipulation of books of account or through fictitious accounts, and conversion of property, among others.
 "bank fraud, bank scam")
