Bank frauds in India have jumped threefold last year, with loans contributing to the bulk of such cases, while discrepancies in digital payments had declined. The amount of frauds climbed to Rs 36,000 crore ($4.2 billion) at the end of March this year, compared with Rs 12,230 crore a year ago, according to the Reserve Bank of India’s (RBI’s) latest annual report, which looked at cases above Rs 1 lakh.
The jump was exacerbated by an addition of 122 cases amounting to a fraud of Rs 18,674 crore.
These cases were removed from classification as fraud in previous years, but added back in the latest year after a court ruling.
The rise in cases underscores the challenges being faced by the banking regulator in the world’s fastest growing major economy even as credit growth slows.
This comes in the wake of a suspected fraud reported by IndusInd Bank Ltd earlier this month, which led to an upheaval at the lender, including top-level exits to rating cuts.
Frauds in private banks rose 270%, while their state-owned peers, which accounted for bulk of the discrepancies, showed a 177% growth in such cases.
Digital payment frauds fell to Rs 520 crore last fiscal year from Rs 1,460 crore during the previous year even as transactions through mobile applications and cards gain popularity.
The central bank also mentioned that it is planning a Digital Payments Intelligence Platform to curb payment-related frauds.
Transactions made using Unified Payments Interface (UPI)—that allows users to transfer money instantly using their mobile phones — rose 30% from a year ago to Rs 260 lakh crore.
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