7.25 Lakhs Payment Frauds worth Rs. 573 Crores happened in FY 2022-23

The Minister of State in the Ministry of Finance Dr. Bhagwat Karad has replied to questions asked in Rajya Sabha that 7.25 Lakhs Payment Frauds worth Rs. 573 Crores happened in FY 2022-23.

The Minister Shri C. VE. Shanmugam asked the following questions in Rajya Sabha:

Will the Minister of FINANCE be pleased to state:

(a) whether it is a fact that UPI frauds are on the rise in the country;

(b) if so the details thereof;

(c) the steps being taken by the Government to address the rising number of UPI fraud cases in the country;

(d) whether the Government is in consultation with the UPI service providers and financial institutions to implement stronger security measures to prevent fraudulent activities on the UPI platform;

(e) if so, the details thereof and if not, the reasons therefor; and

(f) the details on the financial compensation or assistance being given to victims of UPI fraud in the country?

The Minister of State in the Ministry of Finance Dr. Bhagwat Karad replied:

(a) and (b): As per the Reserve Bank of India (RBI), the domestic payment fraud data for UPI, as reported by commercial banks, non-bank PPI issuers and non-bank credit card issuers for the last three financial years is as under:

Payment fraud increased from FY2020-21 to FY2022-23, owing to greater reporting by several major banks, non-bank PPI issuers, and non-bank card issuers.

(c) to (e): NPCI has implemented a number of measures to combat UPI fraud, including stringent device binding between a customer’s mobile number and his or her device, the use of two factor authentication, features in the UPI app that notify the customer on the app itself during the transaction journey, daily debit limits in a customer’s account, and limits and curbs on use cases that are abused by fraudsters.

Furthermore, NPCI provides a free fraud monitoring service to all banks, with rule-writing capabilities to notify and deny transactions for fraud reduction, and banks are assigned a risk score using Artificial Intelligence/ Machine Learning models. NPCI also works with other government ministries, the Reserve Bank of India (RBI), banks and financial institutions, and Law Enforcement Agencies (LEAs).

The Ministry of Home Affairs (MHA) has set up the Indian Cyber Crime Coordination Centre (I4C) to deal with cybercrime in a coordinated and effective manner.

MHA also established a National Cybercrime Reporting Portal and a National Cybercrime Helpline No. “1930” to help victims/complainants report cybercrime incidents. RBI has also operationalized the Central Payments Fraud Information Registry (CPFIR), a web-based payment-related fraud reporting platform for regulated entities.

The RBI and banks have also conducted awareness campaigns on cybercrime through the dissemination of messages via brief SMS, radio campaigns, and publicity on the prevention of ‘cybercrime’. Furthermore, the RBI has been undertaking electronic banking awareness and training (e-BAAT) initiatives, which include raising understanding about fraud and risk reduction.

(f): The RBI issued instructions to banks on limiting customer liabilities in unauthorized/fraudulent electronic transactions, with circulars dated July 6th and December 14th, 2017 for commercial banks and cooperative banks, respectively, outlining the criteria for determining the customer’s limited liability in various types of digital transactions.