**Executive Summary**
This document is a response to an unstarred question in Lok Sabha regarding bank frauds. It details the measures taken by the Government and the Reserve Bank of India (RBI) to prevent and deter bank frauds, address loan defaults, and expedite investigations. Key information covers the amount involved in fraud cases, the number of cases, and specific steps taken to combat financial crimes, with data reported up to FY 2024-25.
**Key Points / Main Content**
* **RBI Guidelines and NPA Classification:** Banks are required to perform due diligence and credit appraisal before granting loans; however, some loans may become Non-Performing Assets (NPAs) and classified as fraud.
* **Fraud Statistics:**
* The amount involved in fraud cases of Rs. 1 lakh and above declined from Rs. 5,856 crore in FY 2023-24 to Rs. 3,497 crore in FY 2024-25.
* The total number of frauds decreased from 35,530 cases in FY 2023-24 to 11,615 cases in FY 2024-25.
* The amount involved in fraud cases in banks and financial institutions increased from Rs. 11,261 crore in FY 2023-24 to Rs. 34,771 crore in FY 2024-25.
* The total number of frauds during the corresponding period decreased from 36,052 cases in FY 2023-24 to 23,879 cases in FY 2024-25.
* The increase in fraud amounts in FY 2024-25 was due to re-classification after a Supreme Court judgment.
* 122 fraud cases involving Rs. 18,674 crore from previous years were reported in FY 2024-25 after compliance with the Supreme Court's directions.
* Fraud in PSBs as a percentage of gross loans and advances declined to a decadal low of 0.01% in FY 2024-25.
* The share of card/internet frauds in FY 2024-25 was 66.8% in terms of the number of cases and 7.2% in terms of the amount involved.
* **Government and RBI Measures:**
* RBI established a Central Fraud Registry for timely identification, control, and mitigation of fraud risk.
* Credit discipline instilled through the Insolvency and Bankruptcy Code.
* RBI set up the Central Repository of Information on Large Credits (CRILC) to collect, store, and disseminate credit data.
* Public Sector Banks (PSBs) implemented comprehensive Early Warning Systems (EWS) with approximately 80 triggers and third-party data usage.
* The Fugitive Economic Offenders Act was enacted to deter economic offenders from evading the law.
* PSBs advised to obtain certified copies of passports for loan facilities above Rs. 50 crore.
* RBI issued a Prudential Framework for resolution of stressed assets for early recognition, reporting, and time-bound resolution.
* Banks advised to report deficient third-party services and collusion with fraudsters to the Indian Banks' Association.
* The Indian Cyber Crime Coordination Centre (I4C) operationalized the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS) portal.
* The Cyber Fraud Mitigation Centre (CFMC) was established at I4C to tackle online financial crimes.
* Seven Joint Cyber Coordination Teams (JCCTs) formed to foster cooperation in cybercrime investigations.
* National Cyber Forensic Laboratory setup for forensic analysis and investigation of cybercrime.
**Impact Analysis**
**Banks and Financial Institutions (FIs)**
* **Impact:** Banks and FIs are required to comply with RBI guidelines, implement EWS, and report deficient third-party services. They are also impacted by the reclassification of fraud cases and need to adhere to the Supreme Court’s judgment.
* **Action Required:** Banks and FIs must enhance due diligence, implement EWS, report deficient third-party services, and ensure compliance with the Supreme Court’s judgment in fraud classification.
**RBI**
* **Impact:** RBI is responsible for establishing and maintaining systems like the Central Fraud Registry, CRILC, and prudential frameworks. They must monitor and regulate banks and FIs to mitigate fraud.
* **Action Required:** RBI should continue to refine and enforce regulations, monitor fraud trends, and provide guidance to banks and FIs.
**Government**
* **Impact:** The Government is responsible for enacting laws such as the Fugitive Economic Offenders Act and supporting initiatives to combat cybercrime through I4C and JCCTs.
* **Action Required:** The Government needs to continue supporting RBI's initiatives, improve legal frameworks, and foster collaboration among law enforcement agencies.
**Borrowers and Promoters**
* **Impact:** Borrowers and promoters face increased scrutiny and stricter loan approval processes due to enhanced due diligence and EWS.
* **Action Required:** Borrowers and promoters must ensure full transparency and compliance with loan terms to avoid being flagged under EWS.
**Law Enforcement Agencies (LEAs)**
* **Impact:** LEAs are involved in investigating cybercrimes through JCCTs and benefit from the National Cyber Forensic Laboratory. They require cooperation from banks and financial institutions.
* **Action Required:** LEAs must actively participate in JCCTs, utilize the National Cyber Forensic Laboratory, and cooperate with banks and financial institutions in investigations.
Key Entities Referenced
Reserve Bank of India (RBI): India's central bank, responsible for regulating banks and financial institutions and setting guidelines on loans and advances.
Ministry of Finance: The government ministry responsible for the economy of India, including overseeing banks and financial institutions.
Non-Performing Assets (NPAs): Loans or advances where principal or interest payments are overdue by a specified period; often linked to bank frauds.
Insolvency and Bankruptcy Code: A law enacted to instill credit discipline.
Public Sector Banks (PSBs): Banks with government majority ownership, mentioned in the context of reforms and fraud incidence.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO- 333
ANSWERED ON MONDAY, FEBRUARY 02, 2026/MAGHA 13, 1947 (SAKA)
Bank Frauds
333. SHRI SELVAGANAPATHI T.M.:
Will the Minister of FINANCE be pleased to state:-
(a) whether it is a fact that fraudsters continue to cheat the banking system and duped lenders and
depositors;
(b) if so, the details thereof;
(c) whether it is also a fact that the size of bank frauds has been rising but cases are on the decline;
(d) if so, the details thereof;
(e) whether it is true that the amount of money defrauded rose to Rs. 34,771 crore during the year 2024-
25 from Rs.11,261 crore in 2023-24 and if so, the reasons therefor;
(f) whether it is also a fact that the Public Sector Banks reported the highest share of frauds related to
advances, both in terms of number of cases and the amount involved and if so, the details thereof; and
(g) the details of the share of card/Internet frauds detected across all bank groups in both number and
amount involved during 2024-25?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (g): As per the Reserve Bank of India (RBI) guidelines on loans and advances, banks have been
mandated to carry out proper due diligence and credit appraisal before granting of any loan. However, in
the business of banking it is inevitable that certain number of cases turn Non-Performing Assets (NPAs),
and out of which few of them are classified as fraud.
Comprehensive steps have been taken to keep a check on the banking frauds and to deter fraudsters.
Enabled by these, the amount involved in frauds of Rs. 1 lakh and above based on the date of occurrence
in Banks and Financial Institutions (FIs) have declined from Rs. 5,856 crore in FY 2023-24 to Rs. 3,497
crore in FY 2024-25, which is the lowest since FY 2015-16, while the total number of frauds during the
corresponding period have also decreased from 35,530 cases in FY 2023-24 to 11,615 cases in FY 2024-
25.
Steps taken by the Government and RBI over the last few years to prevent and to deter instances of bank
frauds, to address issues related to loan defaults and to expedite the investigation of bank fraud cases
include, inter alia, the following:
(i) An online searchable database of frauds reported by banks, in the form of Central Fraud Registry,
has been set up by the RBI to enable timely identification, control and mitigation of fraud risk.
(ii) Credit discipline was instilled through—
(a) enactment of the Insolvency and Bankruptcy Code; and
(b) setting up of the Central Repository of Information on Large Credits (CRILC) by RBI to
collect, store and disseminate credit data to lenders.(iii) Under the Public Sector Banks (PSBs) Reforms Agenda, comprehensive and automated Early
Warning Systems (EWS) were instituted in PSBs, with approximately 80 EWS triggers and use of
third-party data for time-bound remedial actions in the borrowing accounts to proactively detect
stress and in turn reducing slippage into NPAs.
(iv) The Fugitive Economic Offenders Act has been enacted to provide for measures to deter fugitive
economic offenders from evading the process of law in India by staying outside the jurisdiction of
Indian courts.
(v) PSBs have been advised to obtain certified copy of the passport of the promoters/directors and
other authorised signatories of companies availing loan facilities of more than Rs. 50 crore.
(vi) Prudential Framework for resolution of stressed assets was issued by RBI to provide a framework
for early recognition, reporting and time bound resolution of stressed assets, with a build-in
incentive to lenders for early adoption of a resolution plan.
(vii) Banks have been advised by RBI to report deficient third-party services (such as legal search
reports, property valuers’ reports, etc.) and collusion of these service providers with fraudsters to
the Indian Banks’ Association, which maintains a caution list of such service providers.
(viii) The Indian Cyber Crime Coordination Centre (I4C) has operationalised Citizen Financial Cyber
Fraud Reporting and Management System (CFCFRMS) portal for immediate reporting of
financial frauds and to stop siphoning-off of funds by the fraudsters.
(ix) Cyber Fraud Mitigation Centre (CFMC) has been established at I4C with representatives of major
banks, Financial Intermediaries, Payment Aggregators, Telecom Service Providers, IT
Intermediaries and States/UTs Law Enforcement Agencies (LEAs) to work together for
immediate action and seamless cooperation to tackle online financial crimes.
(x) Seven Joint Cyber Coordination Teams (JCCTs) have been formed to foster a close cooperation
among LEAs during interstate cybercrime investigations. It focuses on operational cooperation in
parallel investigations in various States/UTs.
(xi) National Cyber Forensic Laboratory has been setup as a facility for forensic analysis and
investigation of cybercrime by use of the latest digital technology to support investigations
undertaken by LEAs.
As per RBI data on frauds, in respect of amount involved of Rs. 1 lakh and above in each case and based
on the date of reporting, amounts involved in fraud cases in banks and financial institutions increased
from Rs. 11,261 crore in financial year (FY) 2023-24 to Rs. 34,771 crore in FY 2024-25, while the total
number of frauds during the corresponding period decreased from 36,052 cases in FY 2023-24 to 23,879
cases in FY 2024-25.
The sudden increase in amounts involved in frauds reported during FY 2024-25 was primarily due to
fraud re-classification by banks after re-examination and ensuring compliance with the judgement of the
Hon’ble Supreme Court in Civil Appeal No. 7300 of 2022 in the matter of State Bank of India & Ors. Vs.
Rajesh Agarwal & Ors. dated 27.3.2023. It is also pertinent to note here that these cases have occurred in
previous years. As per RBI inputs, 122 fraud cases with amount involved Rs. 18,674 crore pertaining to
previous financial years were reported afresh in FY 2024-25 by banks after complying with the directions
mentioned in the said judgement. Fraud classification in these cases were earlier withdrawn by banks due
to non-adherence with the aforesaid judgement.
Further, as per the Report on Trends and Progress of Banking in India 2024-25 published by RBI in
December 2025, for the entire banking sector the amount involved in frauds are majorly contributed by
advances-related frauds. However, frauds in PSBs as a percentage of gross loans and advances wherein
amount involved is Rs. 1 lakh and above, based on date of occurrence of frauds, have declined to a
decadal low of 0.01% in FY 2024-25, which is lower than the Private Sector Banks which stand at 0.04%
in FY 2024-25.
Based on the date of occurrence of frauds in banks and financial institutions, in respect of amount
involved of Rs. 1 lakh and above in each case, during FY 2024-25, the share of card / internet frauds out
of the total was 66.8% in terms of number of cases and 7.2% in terms of amount involved.
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