Reclassified legacy cases push bank fraud value to ₹36,000 crore in FY25
India’s banking sector witnessed a sharp threefold rise in the total value of frauds to ₹36,014 crore in FY25, primarily due to the reclassification of old cases following a Supreme Court directive. According to the Reserve Bank of India’s (RBI) annual report released on Thursday, while the number of reported fraud cases fell to 23,953 in FY25 from 36,060 in FY24, the overall value jumped from ₹12,230 crore last year. The surge was largely driven by the fresh reporting of 122 legacy cases amounting to ₹18,674 crore, which were re-examined in compliance with the apex court’s March 2023 judgement. The RBI stated that the removal of the fraud classification in earlier years and subsequent re-reporting after ensuring compliance was the key factor behind the spike in the total value of frauds.
Despite the decline in the number of overall cases, digital payment frauds — covering card and internet transactions — continued to dominate in terms of volume, accounting for over 56% of the reported incidents. In contrast, loan-related frauds remained the largest in value terms, contributing over 92% of the total fraud amount reported during the year. Private sector banks registered the highest number of fraud incidents, representing nearly 60% of the cases, mainly within digital transactions. However, public sector banks bore the brunt in terms of value, accounting for more than 71% of the total amount involved in frauds reported in FY25.
In response to the increasing risk of digital payment frauds, the RBI announced its plan to introduce exclusive internet domains such as ‘.bank.in’ for regulated banking entities and ‘.fin.in’ for non-bank financial players. The move is aimed at enhancing public trust in online financial services, reducing phishing attacks, and improving cybersecurity. The Institute for Development and Research in Banking Technology (IDRBT) has been appointed as the domain registrar, with the initiative expected to roll out in FY26.
