Bank Frauds in India Decline by 61% in FY 2024-25 as RBI Strengthens KYC and Transaction Monitoring Systems: Lok Sabha Answer by FinMin
Contrary to some earlier reports suggesting a significant surge in bank frauds, government data shows a sustained downward trend in fraudulent activity.
India has recorded a dramatic reduction in bank frauds in the financial year 2024-25, with cases falling by over 61 percent compared to the previous year, according to data released by the Ministry of Finance in the Lok Sabha. The latest Reserve Bank of India (RBI) figures show that the number of reported frauds in commercial banks and financial institutions plummeted from 3,22,473 cases...
India has recorded a dramatic reduction in bank frauds in the financial year 2024-25, with cases falling by over 61 percent compared to the previous year, according to data released by the Ministry of Finance in the Lok Sabha. The latest Reserve Bank of India (RBI) figures show that the number of reported frauds in commercial banks and financial institutions plummeted from 3,22,473 cases in FY 2023-24 to just 1,25,293 cases in FY 2024-25.
Contrary to some earlier reports suggesting a significant surge in bank frauds, government data indicates a sustained downward trend in fraudulent activity. The 61.15 percent drop in fraud cases has been attributed to a combination of regulatory vigilance and technological upgrades across the banking ecosystem.
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Over the past year, the RBI has enforced strict compliance with its Master Directions on Know Your Customer (KYC) for all regulated entities, including commercial banks and financial institutions. These guidelines require banks to adopt board-approved KYC policies covering comprehensive customer onboarding protocols and advanced transaction monitoring processes. In practice, this means banks are now equipped with software systems capable of generating alerts whenever customer transactions deviate from established risk profiles or appear suspicious relative to updated account information.
Continuous monitoring of compliance by the RBI has been a key factor in ensuring that banks follow these regulations rigorously. The central bank has further mandated robust internal audit mechanisms, early warning systems, and the red flagging of suspicious accounts.
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Banks are now expected to report potential frauds to law enforcement agencies and to utilize data analytics and market intelligence units to fortify their risk management frameworks. The combination of advanced analytics and regulatory oversight has enabled early detection and reporting of fraud, preventing escalation and minimizing losses to both customers and financial institutions.
Additionally, all regulated entities are required to report suspicious transactions and those specified under the Prevention of Money Laundering (PML) Rules, 2005, to the Financial Intelligence Unit (FIU). The FIU plays a pivotal role by sharing this information with national and international law enforcement agencies, regulatory bodies, and foreign counterparts to coordinate efforts against money laundering and other financial crimes. Such multilayered coordination has strengthened the national financial intelligence network and heightened the ability to combat not just fraud, but also other related illicit activities.
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