The aggregate amount involved in frauds in the banking sector declined by about 46 per cent to ₹19,485 crore in the first half of the current financial year, as against ₹36,316 crore in the year ago period, per RBI data.
However, the number of frauds in the reporting period was about 33 per cent higher at 5,406 against 4,069 in the year ago period, according to RBI’s Report on Trend and Progress of Banking in India 2021-22.
The aggregate amount involved in frauds in FY22 was about 56 per cent lower at ₹60,389 crore against ₹1,37,828 crore in FY21. But the number of frauds in FY22 was up by about 24 per cent at 9,102 against 7,358 in FY21.
Trust issues
Banking frauds have implications for financial stability as they are a source of reputational, operational and business risk, along with endangering customers’ trust in the system, RBI said.
Based on the date of occurrence of frauds, advances-related frauds formed the biggest category prior to 2019-20, according to the report. However, in terms of number of frauds, the modus operandi shifted to card or internet-based transactions. Additionally, cash frauds are also on the rise.
The number of fraud cases reported by private sector banks outnumbered those by public sector banks for the second consecutive year in 2021-22, the report said.
On the other hand, in terms of the amount involved the share of PSBs was 66.7 per cent in 2021-22, compared with 59.4 per cent in the previous year.