Number Of Bank Frauds Fall 57% But Amount Rises 46% To Rs 48021 Crore In FY26

Mumbai: Despite a drop in the number of reported bank frauds in 2025-2026, the total amount involved in these frauds has more than quadrupled over the last three years, according to the Reserve Bank of India’s (RBI) Annual Report released on Friday.

The banking industry reported frauds worth ₹48,021 crore in FY26, up 46.4 per cent from ₹32,803 crore in FY25. The amount was ₹11,013 crore reported in FY24. However, the number of fraud cases dipped to 10,114 in FY26 (down 57.4 per cent) from 23,722 a year ago. The volume of frauds reduced by 71.7 per cent compared to 35,800 cases in FY24.

“An assessment of bank group-wise fraud cases over the last three years indicates that although the number of frauds for public and private sectors banks have reduced, the amount involved has increased over the years,” said the RBI.

However, the RBI said that data for FY26 includes fraud classification in 314 cases amounting to Rs 30,199 crore, pertaining to previous financial years. The data was reported afresh in FY26 after re-examination and ensuring compliance with a Supreme Court judgement dated March 27, 2023.

While the highest number of frauds was reported under the card, internet and digital payments categories in FY24 and FY25, “advances” accounted for the largest share (85.5 per cent) in FY26.

Of the total amount of frauds, public sector banks accounted for Rs 35,709 crore in FY26 as against Rs 23,617 crore last year and private sector Rs 11,399 crore (Rs 8,927 crore), the RBI said.

Notably, amount involved in advances of banks shot up to Rs 40,774 crore in 8,640 fraud cases as against Rs 30,367 crore (7,924 cases) in the previous year. The fraud amount involved in cards and digital payments fell to Rs 29 crore (293 cases) in FY26 against Rs 517 crore (13,332 cases) in FY25 and Rs 1,452 crore (28,836 cases) in FY24, RBI said.

The RBI is exploring the possibility of introducing a ‘switch on’ and ‘switch off’ facility for all digital payment modes along with a ‘kill switch’ to block all debits from the account in one stroke. This facility would help bolster consumer confidence and contribute towards controlling frauds in digital payment transactions, the RBI Annual Report said. ‘A kill switch facility’ is a mechanism that allows a system, device, account, or service to be disabled or blocked immediately in an emergency or under specific conditions.

Speaking about the benefits of rupee internationalisation, the central bank said that the ascendence of INR as an invoicing and settlement currency is likely to offer protection against exchange rate risk, reduce the requirement for maintaining costly forex reserves in convertible currencies, and provide other benefits.

In this context, the use of the domestic currency also facilitates the development of bilateral exchange rate markets and reduces transaction costs in foreign exchange transactions.

The RBI said that it plans to expand the CBDC pilot to cover new use cases under Direct Benefit Transfer schemes and the domestic retail space, while exploring additional pilots on tokenisation of financial assets and widening participant.

On cross-border payments, the Reserve Bank intends to operationalise bilateral CBDC pilots with select use cases and deepen engagement in multilateral projects. The Unified Lending Interface (ULI) will be scaled up through onboarding of more data service providers and lenders, and MuleHunter.aiTM 33 will be expanded across more banks with new features such as a Mule Registry

Further, the Reserve Bank is targeting to widen digital financial inclusion by enabling every eligible account holder in all districts with at least one digital payment mode among UPI, cards, internet/mobile banking, unstructured supplementary service data (USSD) or AePS said the central bank.