Bank Fraud Cases Drop 67% in FY25, But Card Scam Rules: RBI

Banks have reported 11,615 fraud cases involving Rs 3,497 crore in 2024–25, down from 35,530 cases involving Rs 5,856 crore in 2023–24, according to data published by the Reserve Bank of India (RBI) in its ‘Report On Trend And Progress In Banking In India’. This represents a 67.3% decline in the number of cases and a 40.3% decline in the amount involved year-on-year.

Within this, advances-related frauds accounted for 19.1% of cases and 33.2% of the total amount involved, with 2,214 cases amounting to Rs 1,159 crore in 2024–25, compared with 5,006 cases involving Rs 4,142 crore in the previous year. Card and internet frauds formed the largest share by volume, accounting for 66.8% of total cases, with 7,756 incidents, but represented only 7.2% of the total amount, at Rs 252 crore.

Deposit-related frauds comprised 6% of cases and 9.3% of the amount involved, with 701 cases amounting to Rs 325 crore. The category labelled “others”, which includes miscellaneous and operational frauds, accounted for 5.2% of cases but 45.4% of the total amount, with 608 cases involving Rs 1,587 crore during the year.

For H1 2025–26 (April–September 2025), banks reported 509 fraud cases involving Rs 111 crore on a date-of-occurrence basis. Advances-related frauds during this period stood at 151 cases amounting to Rs 42 crore, while card and internet frauds accounted for 128 cases involving Rs 4 crore. Deposit-related frauds numbered 67 cases involving Rs 24 crore during the same period.

Alongside publishing detailed fraud data, the RBI outlined a series of regulatory and supervisory measures aimed at strengthening fraud prevention and customer protection. The central bank stated that it has introduced a principle-based framework for the authentication of digital transactions. In addition, regulated entities have been directed to use exclusive internet domains and designated numbering series to reduce impersonation and cyber-enabled fraud.

Furthermore, the RBI highlighted its collaboration with other authorities, including the Ministry of Home Affairs, to develop and operationalise system-wide measures to curb digital and cyber-enabled fraud. The report emphasised that regulated entities must strengthen internal controls, ensure adequate grievance redress officers at multiple levels, and enhance digital financial literacy among customers.

The RBI also detailed recent technology-led initiatives. Notably, it developed MuleHunter.ai, a system designed to facilitate system-wide learning and help banks identify and flag potential mule accounts. As of December 17, 2025, 23 banks had implemented MuleHunter.ai. In parallel, the RBI is developing a Digital Payments Intelligence Platform (DPIP), which aims to leverage artificial intelligence to flag risky transactions and enable intelligence-sharing for fraud detection and prevention across the ecosystem.

In addition, the central bank stated that it is reviewing its 2017 instructions on limiting customer liability in unauthorised electronic banking transactions, citing changes in payment channels, increased digital transaction volumes, and evolving fraud patterns. According to the RBI, this review is intended to update safeguards in line with the current digital banking landscape.

The RBI stated that fraud data reported by banks is subject to revision due to legal and supervisory requirements, particularly following directions issued by the Supreme Court in March 2023 on adherence to the principles of natural justice. The court held that banks must provide borrowers with an opportunity to be heard before classifying an account as fraudulent, prompting a review of past classifications. The central bank clarified that frauds reported in a given year may relate to transactions that occurred several years earlier and may subsequently be revised, reclassified, or withdrawn by banks.

As of September 30, 2025, banks and financial institutions withdrew 942 fraud cases involving Rs 1,28,031 crore after re-examination, citing non-compliance with the Supreme Court’s judgement. These withdrawals affected historical fraud data and altered previously reported aggregates. In addition, the RBI reported that 122 fraud cases amounting to Rs 18,336 crore, pertaining to earlier financial years, were classified and reported afresh during 2024–25 after banks completed re-examination and ensured compliance with due process requirements.

The RBI further noted that figures reported in its fraud tables represent amounts involved, not actual losses, and may change over time depending on recoveries and supervisory review. It also cautioned that constituent items in the fraud data may not add up to totals due to rounding and subsequent revisions filed by regulated entities.

These figures matter because they illustrate how the nature of banking fraud in India is changing, even as headline numbers show a decline. A sharp fall in total cases and amounts involved may suggest improvement at first glance.

However, the data also shows that digital channels now account for the bulk of fraud incidents, with card and internet fraud making up more than two-thirds of all cases. This has direct implications for consumer trust, as high-frequency, low-value fraud disproportionately affects retail users and small businesses that rely heavily on digital payments.

At the same time, the distribution of amounts involved highlights where systemic risk continues to sit. Advances-related and operational frauds account for a smaller share of cases but a much larger share of value, reinforcing why banks and regulators continue to focus on credit processes, internal controls, and post-disbursement monitoring. Moreover, the large share attributed to the residual “others” category underlines the diversity of fraud risks that fall outside conventional classifications.

Together, the numbers highlight a system where different fraud types demand different regulatory tools, compliance investments, and accountability structures. How banks and the RBI prioritise resources across these layers will influence not only fraud outcomes but also user confidence in digital banking and the credibility of safeguards that underpin India’s payments infrastructure.