Kotak Mahindra Bank has called for standardisation of fraud reporting across banks.

According to a statement issued by the private sector lender on Tuesday, there is a significant variance in what is chosen to be reported to the RBI by other banks.

“We have appealed to the regulator vide our letters dated March 17, 2022 and August 30, 2022 to enforce standardisation in reporting requirements,” it said.

The statement was in response to some recent news reports which claimed the bank had seen substantially higher frauds as compared with its peers during April-June. The news reports were based on data collected by the RBI as on Jul 14, and released by the government in response to a question asked by a Member of Parliament in the Rajya Sabha.

According to the data, Kotak Bank reported the highest number of frauds at 5,278 followed by ICICI Bank (436 cases), HDFC Bank (303), Axis Bank (195), IDBI Bank (144), IndusInd Bank (200), and RBL Bank (150).

Kotak Bank said that the number of frauds reported include instances of skimming, phishing, vishing, e-commerce frauds, across debit cards, credit cards, UPI, mobile banking, internet banking, payment gateways, etc. regardless of whether customers and the bank faced losses, or whether the fraud amounts were recovered eventually.

Related Stories
RBI issues digital lending norms to curb malpractices
The framework prohibits automatic increases in credit limits without the explicit consent of the borrower.
READ NOW

Of the 5,278 instances of fraud, 97 per cent are digital and card-related frauds that occurred due to customers unwittingly compromising their credentials by clicking on unknown links, or giving access to their devices or sharing their credentials with unscrupulous individuals willingly, the statement read.

“It is our submission that other banks do not appear to be exhaustively or uniformly reporting these types of frauds. Such frauds are not a reflection of any vulnerabilities in the bank’s secure infrastructure and systems,” the bank said.

It added that it has seen a steady downward trend of 27 per cent year-on-year in such digital fraud transactions reported by customers, while customer acquisition and digital transactions are increasing exponentially.

Related Topics