Banking fraud incidents rise to 13,530 YoY in 2022-23, but amount involved almost halves to Rs 30,252 crore
Posted Date – Tue, 5/30/23 at 11:59pm
Mumbai: The number of frauds in the banking sector rose to 13,530 year-on-year in 2022-23, but the amount involved has almost halved to Rs 30,252 crore, data released by the Reserve Bank on Tuesday showed.
The Reserve Bank’s 2022-23 annual report said that, in terms of volume, fraud occurred mainly in the digital payments (card/internet) category.
However, in terms of value, fraud occurs primarily in the loan portfolio (advance category).
A total of 9,097 frauds involving Rs 59,819 crore have occurred in 2021-22. In 2020-21, the number of frauds was 7,338 involving an amount of Rs 1,32,389 crore.
“An assessment of banking group fraud cases over the past three years shows that while private sector banks report the highest amount of fraud, public sector banks continue to contribute the largest amount of fraud over the period 2022-23,” the report said.
The data pertains to reported frauds of Rs 1 lakh and above over a three-year period.
The amount involved in total reported fraud fell 55 per cent in the 2021-22 period compared with 2020-21, the report said.
Also, proportionally, the total amount involved in fraud continues to decline in the 2022-23 period and is 49% lower than in 2021-22.
“While microcard/internet fraud contributed most to the number of reported frauds by private sector banks, fraud by public sector banks was mainly in the loan portfolio,” the RBI said.
Fraud reported in a year may have occurred years before the reporting year, it said.
The central bank also said an analysis of the years of fraud reported between 2021-22 and 2022-23 revealed a significant time lag between the date the fraud occurred and the date it was discovered.
In value terms, fraud in previous financial years accounted for 93.7 per cent of reported fraud in 2021-22.
Likewise, by value, 94.5% of reported fraud in 2022-23 occurred in the previous financial year.
During 2022-23, public sector banks reported 3,405 cases of fraud involving Rs 2,112.5 crore while private banks reported 8,932 cases involving Rs 8,727 crore. The rest came from foreign banks, financial institutions, small finance banks and payment banks.
According to the data, cases related to loans (advance payments) reported 95% or Rs 28,792 crore out of a total of Rs 3,025.2 crore.
The central bank said the reported amounts involved did not reflect the amount of losses incurred. Depending on the recovery rate, the resulting damage will be reduced. Furthermore, the entire amount involved is not necessarily transferred.
The Reserve Bank of India has said it will do more to check fraud in the banking sector.
