Rs 580 cr lost to digital payment frauds in last 5 yrs, only 43% recovered—govt to Parliament

The Print

6 days ago

In a written response to a question by Congress MP Anto Antony and BJP MP Baijayant Panda in Lok Sabha on Monday, Minister of State for Finance Pankaj Chaudhary said that more than 6.5 lakh digital payment frauds have been reported in the last five years.
New Delhi: Indians lost Rs 580 crore to digital payment frauds in the last five years, 67 percent of which were reported in just the last two years, the government has informed Parliament.
Among the states and Union Territories, Maharashtra, Haryana, Delhi and Tamil Nadu top the chart when it comes to digital payment frauds. The four states together accounted for 69 percent of total reported frauds in the last five years.
In 2024-25, Tamil Nadu with 25 percent of the total number of digital payment frauds pipped Maharashtra, which was holding the top spot for the previous four years.
However, the total frauds did come down by 50 percent from Rs 2,93,488 in 2023-24 to Rs 1,45,738 in 2024-25, but it still remained higher than the prior three years.
Recovery of money lost in digital frauds remains low. In the last five years, just 43 percent of money was recovered across the country.
In his reply, Chaudhary mentioned that the onus of curbing the digital payment frauds lies with the states as police and public order are state subjects under the Seventh Schedule of the Constitution.
'The States/UTs are primarily responsible for the prevention, detection, investigation and prosecution of crimes including cyber-crime through their law enforcement agencies (LEAs). The Central Government supplements the initiatives of the States/UTs through advisories and financial assistance under various schemes for capacity building of their LEAs,' Chaudhary submitted in his written response.
Also Read: More salaried than self-employed Indians earning less than Rs 25k a month face borrower stress—study
Dubious records for HDFC, Kotak Mahindra
According to the government data, Kotak Mahindra Bank reported the highest number (1,26,974) of digital frauds cumulatively over the last five years, while HDFC Bank reported the highest number of cases with over 35,000 in 2024-25.
For 2024-25, the top five companies reporting digital frauds include HDFC Bank, Airtel Payments Bank, Axis Bank, ICICI Bank, and State Bank of India. All of them together account for 65 percent of reported cases during the year.
In May, Airtel launched an AI-enabled Fraud Detection Solution with a multi-layered intelligence platform to safeguard customers from a range of scams and fraud.
Chaudhary said that the government has taken steps to protect account holders from cyber frauds. For instance, the Reserve Bank of India (RBI) issued Master Directions on Digital Payment Security Controls in February 2021 to combat web and mobile app threats.
These guidelines mandate the banks to implement a common minimum standards of security controls for various payment channels like internet, mobile banking, card payment etc. RBI and banks have also been taking up awareness campaigns through short SMS, radio campaigns, publicity on prevention of 'cyber-crime', etc.
The RBI has also launched an AI-based tool 'MuleHunter' for identification of money mules and advised the banks and financial institutions for its uses.
To prevent frauds related to UPI transactions, the National Payments Corporation of India (NPCI) has implemented device binding between mobile number and the device, two-factor authentications through PIN, daily transaction limit, limits and curbs on use cases etc. It also provides AI/Machine Learning-based fraud monitoring solutions to all the banks to generate alerts and decline transactions.
(Edited by Tony Rai)
Also Read: Three yrs since launch, govt-backed e-commerce network ONDC is a tortoise running with the hares