Payment Frauds Surge By 70.64% To Rs 2,604 Cr From Oct To Mar
The number of fraud cases also increased to 15.51 lakh in March 2024, compared to 11.5 lakh in the previous six-month period, according to RBI data
Payment frauds are on the rise, as indicated by data from the Reserve Bank of India (RBI). Domestic payment frauds surged by 70.64 per cent to Rs 2,604 crore in the six-month period ending March 2024, up from Rs 1,526 crore in the same period last year.
The number of fraud cases also increased to 15.51 lakh in March 2024, compared to 11.5 lakh in the previous six-month period, according to RBI data.
While the RBI's data only covers domestic financial transactions, the new format now includes e-commerce transactions, FASTag transactions, digital bill payments, and card-to-card transfers through ATMs, among others. However, failed transactions, chargebacks, reversals, and expired cards/wallets are excluded. The data on domestic payment fraud statistics is reported by scheduled commercial banks (excluding RRBs), non-bank PPI issuers, and non-bank credit card issuers in Central Payments Fraud Information Registry (CPFIR).
In March alone, there were 2.57 lakh payment frauds involving Rs 471 crore, and in February, there were 2.53 lakh frauds amounting to Rs 503 crore.
Frauds pose reputational, operational, and business risks for banks, eroding customers’ trust in the banking system and impacting financial stability. Despite stringent regulations and improved technology, fraudsters continue to find new ways to exploit the system.
A recent RBI report highlighted that while new technologies enhance banking operations' efficiency and effectiveness, they also increase the risks of fraud and data breaches. The RBI has been updating regulations to protect customers while ensuring that innovations are not stifled.
On 27 December 2023, the RBI noted a sudden surge in frauds in the credit & debit cards and internet segments. Although the average fraud amount declined by 85 per cent during April-September 2023-24, the number of frauds rose sharply by 624 per cent in the card and internet segment based on the reporting date.
The number of frauds in the card and internet segment increased to 12,069 cases involving Rs 630 crore during April-September 2023-24, compared to 2,321 cases involving Rs 87 crore in the same period last year. Overall, banks reported 14,483 fraud cases involving Rs 2,642 crore during April-September 2023-24, up from 5,396 cases involving Rs 17,685 crore in the same period a year ago.
According to RBI data, banks and NBFCs added 1.65 crore credit card users during FY24, bringing the total number of card users to 10.18 crore. Credit card transactions reached a record level of Rs 164,223 crore in March 2024, up from Rs 149,206 crore in February. Point-of-sale transactions accounted for Rs 60,378 crore in March 2024.
With credit card usage rising sharply, banks are aggressively adding new users by offering attractive reward points, EMI facilities, and personal loans based on credit card usage and credit ratings.
