RBI Reports Reveal A High Fraud Rate For FY23, Although Amount Involved Is Considerably Low

According to the Reserve Bank data released on Tuesday, May 30, the amount involved in banking fraud practically halved to Rs 30,252 crore, while the number of incidents increased to 13,530 in 2022–23. 

A Lowered Fraud Value

According to the Reserve Bank’s Annual Report 2022–23, digital payments (card/internet) accounted for the majority of fraud cases.

However, frauds have mostly been documented in the loan portfolio (advances category) in terms of value. In 2021–2022, there were 9,097 scams totaling Rs 59,819 crore. There were 7,338 scams in 2020–2021, with a total monetary value of Rs. 1,32,389 crore.

According to the central bank, the figures provided do not accurately reflect the loss experienced. Recoveries alter the amount of the loss. Additionally, not all of the money is necessarily diverted.

As per the data, there was a 55% decrease in the overall number of recorded frauds from 2020–21 to 2021–22. Additionally, the total amount engaged in scams decreased during 2022–2023 by 49% over 2021–2022 levels.

A Time Lag

In terms of value, the amount involved in frauds in prior fiscal years made up 93.7% of them recorded in 2021–22.

Similarly, by value, 94.5% of frauds recorded in 2022–23 happened in prior fiscal years.

Hence the central bank noted that an extended period of time passed between the date a fraud occurred and the time it was discovered after a review of the vintage of frauds recorded in 2021–22 and 2022–23.

As per CNBC reports, private banks reported 8,932 incidents involving Rs 8,727 crore during 2022–2023, while public sector banks recorded 3,405 frauds totaling Rs 21,125 crore. The remainder came from domestic and international banks, businesses, minor financing banks, and payment banks.

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