In a surprising financial twist, the number of bank frauds in India tripled in FY25, yet the total amount lost dropped significantly. This shift reveals a crucial change in the type of frauds happening across the banking sector—moving from large corporate scams to more frequent, smaller frauds.
Let’s break down what’s really happening, why it matters, and what it tells us about India’s financial system today.
Number of Frauds Rise Sharply, Amount Falls
According to the Reserve Bank of India’s (RBI) Annual Report, the number of fraud cases jumped from 7,359 in FY21 to 23,953 in FY25—a threefold increase.
But here’s the twist: while the number of cases went up, the amount involved dropped by nearly 74%, from ₹81,901 crore in FY21 to ₹36,614 crore in FY25.
This dramatic fall in the total amount clearly suggests one thing: the rise of low-value frauds.
More Frauds in Retail Banking Than Corporate Loans
In the past, bank frauds in India were mostly big-ticket scams involving corporate loans and non-performing assets (NPAs). But things have changed.
Today, more frauds are being reported in retail banking, especially involving:
Credit cards
Debit cards
Online transactions
In fact, low-value frauds in card/internet banking increased sharply in FY25. This shift shows how common banking customers, not just big businesses, are becoming frequent targets.
Public vs Private Banks – Who’s Hit More?
The RBI data shows an interesting pattern:
Public sector banks had more fraud cases in earlier years.
But in FY25, private sector banks reported higher frauds in number—especially in low-ticket retail transactions.
Why? One reason is that private banks have pushed harder into digital lending and faster onboarding, which sometimes leaves gaps in security and customer verification.
Breakdown by Area of Operation
According to the RBI, fraud cases are mostly being classified under:
Advances (Loans)
Card/Internet Transactions
Off-balance sheet items
In FY25:
Card/Internet frauds rose to 20,802 cases.
Loan-related frauds stood at 2,982 cases, but involved higher amounts.
This highlights a trend—fraudsters are now going for volume instead of value.
Why Did the Amount Involved Drop?
One key reason for the decline in total fraud amount was the closure of several large fraud cases in FY24. In particular:
₹18,642 crore worth of old cases were reviewed and reclassified.
Many of these were related to corporate scams and were resolved or closed after detailed scrutiny.
Also, post-COVID reforms in compliance and internal controls, especially after the Supreme Court judgment dated March 27, 2023, have helped tighten banking operations.
How RBI Defines Fraud
Fraud in banking is broadly defined under:
Indian Penal Code (IPC) and
Prevention of Corruption Act
It includes: Misrepresentation of facts ,Cheating and forgery, Criminal breach of trust, Diversion of funds, Identity theft, Conversion of property.
Banks are now required to report all confirmed cases, no matter the size, which is also a reason why more frauds are being captured than ever before.
What Should You Do As a Customer?
With the rise in low-value frauds, especially in online and card-based transactions, here are some safety tips for you:
1. Never share your OTP, PIN, or CVV with anyone.
2. Regularly check your bank statements and SMS alerts.
3. Avoid clicking on suspicious links.
4. Enable two-factor authentication on digital wallets and apps.
5. Report frauds immediately to your bank.
Hence:
India’s banking system is going through a major digital shift, and with it comes new challenges. While the era of massive corporate loan scams is slowing down, a new wave of digital frauds targeting everyday customers is rising.
The good news? Better reporting, stronger systems, and tighter laws are helping banks detect frauds faster.