The number of bank frauds reported in India declined sharply in 2025–26, but the total amount involved increased, according to the Reserve Bank of India’s (RBI) latest report on ‘Trends and Progress of Banking in India 2024–25’.
As of end-September, banks reported 5,092 fraud cases, significantly lower than 18,386 cases recorded during the same period last year. However, the value of frauds rose to ₹21,515 crore during April–September, compared with ₹16,569 crore in the year-ago period.
“Frauds present multiple challenges by exposing financial institutions to reputational, operational and business risks, while also weakening customer trust,” the RBI said in the report.
Encouragingly, the share of high-value frauds has declined. Banks reported 509 fraud cases involving amounts of ₹1 lakh and above, totalling just ₹11 crore so far in FY26, compared with 11,615 such cases worth ₹3,497 crore in FY25.
The increase in the value of frauds follows trends seen in FY25, when banks reported 23,879 frauds amounting to ₹34,771 crore, compared with 36,052 cases involving ₹11,261 crore in FY24. The RBI attributed the sharp rise in value largely to the re-examination and fresh reporting of 122 fraud cases worth ₹18,336 crore, in line with the Supreme Court’s March 27, 2023 judgment on fraud classification.
The ruling, delivered in State Bank of India & Ors. v. Rajesh Agarwal & Ors., upheld borrowers’ right to a hearing before accounts are classified as fraudulent, leading to delayed recognition or reclassification of fraud amounts.
As of September 30, banks and financial institutions also withdrew 942 fraud cases amounting to ₹1.28 lakh crore due to non-compliance with principles of natural justice, the RBI noted.
Card, internet frauds dominate
The report showed that card and internet frauds accounted for 66.8% of the total number of fraud cases reported in FY25, followed by advances-related frauds at 33.1%. Private sector banks accounted for 59.3% of total fraud cases, with card and internet frauds dominating in volume.
In contrast, public-sector banks (PSBs) accounted for 70.7% of the total amount involved, largely driven by advances-related frauds, both in terms of value and number of cases.
The RBI said it continues to work with stakeholders, including the Ministry of Home Affairs, to curb digital and cyber-enabled frauds. Measures include a principle-based framework for digital transaction authentication, exclusive internet domains, and designated numbering series for regulated entities.
The central bank has also rolled out ‘MuleHunter.ai’, a platform to identify mule accounts, now implemented in 23 banks, and a Digital Payments Intelligence Platform (DPIP) that leverages artificial intelligence to flag risky transactions.
“Regulated entities need to strengthen internal controls, ensure adequate grievance redress mechanisms, and enhance digital financial literacy to effectively address digital frauds,” the RBI said.
