In the first half of the current fiscal, the number of bank frauds witnessed a significant on-year increase to 18,461 cases.

The amount involved in these frauds also jumped more than eight-fold to Rs 21,367 crore, RBI data said.

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In its report on Trend and Progress of Banking in India 2023-24, RBI presented the performance of the banking sector, including commercial banks, co-operative banks and non-banking financial institutions, during 2023-24 and 2024-25 so far.

The number of frauds during April-September stood at 18,461 involving Rs 21,367 crore compared to 14,480 cases involving Rs 2,623 crore in the comparative period of the last financial year, based on the date of fraud reporting.

The RBI report said frauds present multiple challenges for the financial system in the form of reputational risk, operational risk, business risk and erosion of customer confidence with financial stability implications.

The share of internet and card frauds in the total stood at 44.7% in terms of amount and 85.3% in terms of number of cases.

In 2023-24, the number of fraud cases reported by private sector banks (PVBs) accounted for 67.1% of the total. In terms of amount involved, however, public sector banks (PSBs) had the highest share of card and internet frauds was highest for all bank groups in 2023-24.

The RBI data said the instances of penalty imposed on regulated entities (REs) increased during 2023- 24 across all bank groups, except foreign banks and small finance banks.

The total penalty amount more than doubled in 2023-24 to Rs 86.1 crore, led by public and private sector banks. The amount of penalty imposed on co-operative banks declined during the year, while there was an increase in instances of penalty imposition.

While many cases of digital fraud result from social engineering attacks on customers, there is also a rapid increase in the use of mule bank accounts to perpetrate such frauds, RBI said.

“This exposes banks not only to serious financial and operational risks, but also to reputational risks. Banks, therefore, need to strengthen their customer onboarding and transaction monitoring systems to monitor unscrupulous activities,” it added.