Spike in loan and digital frauds: RBI data reveals frauds jump three times in FY25
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The overall number of frauds, including those related to loan accounts and digital payments, jumped by three times in FY25, primarily due to reclassification of 122 cases as per a Supreme Court order. The fraud value jumped to ₹36,014 crore in FY25, up from ₹12,230 crore in the previous fiscal year, according to data released by the Reserve Bank of India (RBI).
An analysis of fraud cases across different bank groups over the past three years shows that private sector banks recorded the highest number of fraud incidents, whereas public sector banks accounted for the largest share of the total fraud amount. Most frauds took place in digital payment channels such as cards and internet banking. While digital frauds made up the majority of cases reported by private sector banks, frauds in public sector banks were primarily linked to their loan portfolios.
In 2024-25, private sector banks accounted for nearly 60% of total fraud cases, reporting 14,233 incidents. However, it was public sector banks that saw the highest monetary impact, with frauds totaling ₹25,667 crore — a staggering 71.3% of the total fraud amount across all banks.This trend has been consistent. While private banks have historically led in the number of frauds, public sector banks continue to dominate in terms of the financial value lost to fraud. For example, in 2023-24, public banks reported frauds worth ₹9,254 crore, compared to ₹2,722 crore in private banks, despite having far fewer cases.
Loan Frauds and Digital Scams Dominate
A breakdown by area of operation highlights that loan-related frauds remain the most damaging in monetary terms. In 2024-25, advances accounted for ₹33,148 crore of fraud, or over 92% of the total amount involved. This reflects a sharp rise from ₹10,072 crore in 2023-24.In contrast, digital payment frauds — including those involving cards and internet banking — made up the largest share by number. Of the 23,953 total fraud cases reported in 2024-25, 13,516 were related to card or internet transactions, constituting over 56% of all cases. However, these frauds accounted for just ₹520 crore in losses, showing that while frequent, they typically involve smaller amounts.The RBI has recognized the growing risks in both traditional lending and digital channels. It is currently working on strengthening its fraud detection mechanisms and has already taken steps to improve oversight, enhance reporting standards, and tighten cyber security protocols across the banking sector.
The central bank is also developing advanced analytics systems, including AI-driven tools like MuleHunter, to flag suspicious activities early and bolster the fraud response frameworks of regulated entities.
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