The landscape of bank fraud in India is a growing concern. The Reserve Bank of India (RBI)’s detailed report for the 2024-2025 financial year reveals a mixed trend. While the number of fraud incidents has decreased, the amount of money involved in these frauds has nearly tripled.

Further compounding this worry is the fact that public sector banks have incurred significantly higher fraud amounts compared to private sector banks.

Record Increase in Fraud Amount Over $360 Billion

According to RBI data, a total of $360.14 billion in bank fraud occurred in the country from April 2024 to March 2025. This is approximately 194% or nearly three times higher than the previous financial year (FY2024), which saw $122.30 billion in fraud. A significant factor behind this substantial financial increase is the reclassification of 122 large-value fraud cases (approximately $186.74 billion) from the previous year into the current fiscal year, following a Supreme Court ruling in 2023.

On a positive note, the number of fraud incidents has declined. In FY2024, there were 36,060 fraud incidents, which decreased to 23,953 in FY2025, representing a drop of approximately 34%.

Public Sector Versus Private Sector Banks Where Do They Stand?

Despite the reduction in the number of incidents, public sector banks bore the brunt of financial losses. In FY2025, public sector banks reported frauds totaling $256.67 billion, a significant increase from $92.54 billion in the previous financial year. This accounts for approximately 71.3% of the total fraud amount. In contrast, private sector banks recorded a combined fraud amount of $100.88 billion.

The number of fraud incidents decreased in both types of banks:

• Public Sector Banks: Decreased from 7,460 incidents (FY2024) to 6,935 incidents (FY2025).
• Private Sector Banks: Decreased from 24,207 incidents (FY2024) to 14,233 incidents (FY2025).

Digital Payments and Lending Major Areas of Fraud

RBI’s analysis indicates that the majority of bank fraud incidents were related to digital payments. Card and internet-related fraud accounted for the highest number of incidents (13,516 cases), making up approximately 56.5% of the total. However, the financial amount involved in these types of frauds was comparatively lower ($5.20 billion).

In parallel, loan-related fraud has also become a significant concern. Although the number of loan-related fraud incidents was lower (7,950 cases), the money involved in these cases amounted to approximately $331.48 billion, which is over 92% of the total fraud amount.

In private sector banks, the majority of frauds were related to digital payments. Conversely, a large portion of fraud in public sector banks was linked to lending, reflecting their substantial loan portfolios and associated risks.

This report serves as a renewed warning for banks. Implementing stricter security measures for digital payment systems and loan disbursement is now imperative.