Bank Fraud Cases Fall 61% in FY25 Amid Digital Safeguards: Government

The Indian government informed Parliament on July 21 that reported bank frauds have seen a major decline in FY 2024–25, marking a 61% drop from the previous fiscal. Backed by Reserve Bank of India (RBI) data, this reduction is seen as a result of improved digital security protocols, enhanced monitoring systems, and stronger coordination between financial institutions and law enforcement agencies.

Fraud Cases Drop and Government Clarification

According to the RBI, commercial banks and financial institutions registered about 3.22 lakh fraud cases in FY 2023–24. This number has significantly fallen to nearly 1.25 lakh in FY 2024–25, a year-on-year reduction of over 61%. 

The Ministry also clarified in Parliament that contrary to certain recent reports, there has been no eightfold rise in bank frauds during the current fiscal year. On specific queries around cyber frauds, app-based lending scams, and digital payment frauds, the government provided a detailed 5-year breakdown of data across banks and states, including Odisha, through annexures laid in the Lok Sabha.

RBI Led Digital Security Measures and Tools

To strengthen fraud prevention, the RBI has enforced Master Directions on Digital Payment Security Controls since February 2021 and continues to refine Know Your Customer (KYC) protocols. These require banks to use sophisticated monitoring tools to flag unusual activity and alert the Financial Intelligence Unit (FIU), which works with national agencies to investigate money laundering and other financial crimes. 

In a notable step, the RBI launched 'MuleHunter', an AI-based tool designed to track down mule accounts. The National Payments Corporation of India (NPCI) has further mandated two-factor authentication, device binding, daily UPI transaction limits, and AI/ML-based fraud surveillance.

Awareness Efforts and Federal Responsibilities 

While the Centre continues to issue advisories and schemes to help states build cybercrime-fighting capacity, it reiterated that cybercrime prevention remains primarily a State and Union Territory responsibility under the Indian Constitution. 

Banks are also expected to carry out consistent customer awareness drives using SMS, digital platforms, and radio broadcasts to educate the public on common cyber risks and safeguard practices.

Also Read: New Income Tax Bill: Select Committee Presents Report In Lok Sabha!

Conclusion

With fraud figures seeing a dramatic decline in FY25, the government’s update reflects the growing maturity of India’s digital financial infrastructure. Combined efforts from the RBI, FIU, NPCI, and state-level enforcement bodies appear to be strengthening the system's resilience against cyber and financial crimes.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.