Banks' digital fraud tally nearly doubles

EVEN AS THE OVERALL value of frauds reported by Indian banks halved from ₹59,819 crore in FY22 to ₹30,252 crore in FY23, the value and volume of digital frauds committed using cards and internet-based payment methods nearly doubled in the previous financial year, data from the Reserve Bank of India's (RBI) FY23 annual report showed.

- PIYUSH SHUKLA

While 3,596 frauds amounting to ₹155 crore using cards and internet banking services were reported in FY22, the volume nearly doubled to 6,659 digital frauds in FY23 amounting to ₹276 crore. However, 94.5% of the frauds reported in FY23 by value occurred in previous financial years, and there were delays in identification of fraud and subsequent lag in reporting by lenders.

Experts said fraudsters are using new techniques to cheat customers. These include phishing, malware being designed to extract and copy data from the infected device of a bank customer, vishing and SIM cloning, said a report by Bureau - a single AI architecture platform partnering with lenders for risk compliance solutions.

"I would say banks can obviously keep educating the customers, but a lot of times social engineering become a problem where customers willingly give OTPs, password or let the fraudster hijack their phone. Unfortunately in these cases banks' ability to take corrective measures is limited," said a senior official at a mid-size bank.

Fraudsters also create fake UPI handles on social media to trick people into revealing account details, making the customer download an application which can sometime monitor their mobile or computer screen remotely. There are also more sophisticated scams in which fraud rings get the victim's data and transfer money to an intermediary account.