These days, cybercrime has been on the rise, affecting banks as well. Reports of online fraud against banks are becoming common. To combat online fraudsters, a new portal is being developed in collaboration with all banks and the Reserve Bank.
This portal will centralize information on those involved in online fraud, making it easier to identify them before they can commit fraud again. It will also prevent the repeated use of one account for fraud.
While such portals won’t completely eliminate fraud, they will provide a platform to share information about fraudsters. This portal will include a shared negative list, allowing banks to monitor the activities of such individuals.
Its biggest advantage will be preventing the transfer of funds between different accounts in various banks and financial institutions, aiding in tracking such transactions. This portal will assist banks in providing real-time information about these activities.
In these cases, funds are often transferred across multiple accounts in different banks and financial institutions, making it difficult to trace. Sometimes, the money never returns. Discussions are also underway to integrate the online dispute resolution system of the RBI and the unified dispute resolution option offered by the National Payments Corporation of India.
In the previous financial year, government banks reported around 3,400 cases of fraud amounting to approximately 21,000 crore rupees, while private banks recorded 8,930 cases involving 8,720 crore rupees. All these cases involve fraud of one lakh rupees or more. Banks aim to establish a robust system to prevent such incidents and unauthorized transactions and to create an effective monitoring system.
Bank Frauds
Banks have witnessed maximum number of frauds in digital payment category during the fiscal ended 2023-24, according to the RBI annual report 2022-23.
In FY2023, the total number of fraud cases in the banking system were 13,530. Of this almost 49 per cent or 6,659 cases were in the digital payment – card/internet – category. In the last two years, the highest number of fraud cases were in loan portfolios of banks.
There was a 49 per cent reduction in the amount involved in the total frauds reported during FY2023 over FY2022.
In terms of value, banks reported frauds primarily (Rs 28,792 crore) in the advances category in the previous fiscal. The total amount of fraud in the digital payment category stood at Rs 276 crore in FY23.
An assessment of bank group-wise fraud cases over the last three years showed that while private sector banks reported maximum number of frauds, public sector banks continued to contribute maximum to the fraud amount during 2022-23.
“While small value card/internet frauds contributed maximum to the number of frauds reported by the private sector banks, the frauds in public sector banks were mainly in loan portfolios,” the report said.