Bank Fraud of Rs. 232 Crore in FY 2024-25: Steps Taken by RBI to Stop Them

The Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, responded to questions asked in Rajya Sabha about “Rising bank frauds”.

The Minister, Dr. M. Thambidurai, asked the following questions:

Will the Minister of FINANCE be pleased to state:-

(a) whether the number of bank fraud cases have increased over the last five years;
(b) if so, the details of the number of bank-fraud cases reported during the last five years, yearwise and bank-wise;
(c) the details of time by which investigation was completed in such cases;
(d) the steps taken by Government to expedite the investigation of such cases;
(e) whether Government has taken any initiatives to prevent fraud and loan defaults in public
sector banks; and
(f) if so, the details thereof?

The Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, replied From (a) to (f):

Regarding the fraud cases data, at an annex, the bank-wise and year-wise information of the fraud cases in commercial banks and all India India Financial Institutions (AIFIs) and the amount involved is Rs. 1 lakh and above over the past five years (up to December 2024).

As per RBI’s Master Directions on Fraud Risk Management, Banks must report the cases of frauds instantly to different law enforcement agencies (LEAs), i.e., the Central Bureau of Investigation, State Police, etc., based on the amount involved in the fraud. However, RBI has informed that it does not handle the information about the time taken in investigations.

The government has taken several steps to prevent fraud activity in banks, and because of these efforts, the total amount identified in frauds (Rs. 1 lakh and above per case) has been reduced in public sector banks.

In 2019-20, frauds amounted to Rs. 21,626 crore.

By 2023-24, this amount had declined to Rs. 2,224 crore.

In 2024-25 (till December 2024), it was further reduced to Rs. 232 crore.

Following are the steps that the government takes to prevent bank fraud, handle loan defaults, and speed up investigations:

(i) A searchable database has been set up by RBI to track fraud cases and reduce risks.

(ii) Better Credit Monitoring by introducing Insolvency and Bankruptcy Code and CRILC (Central Repository of Information on Large Credits) created by RBI to gather, store and share credit data to lenders.

(iii) Early Warning Systems (EWS) were introduced for Public sector banks with 80+ warning signs to detect loan risks early.

(iv) The Fugitive Economic Offenders Act was set to prevent economic criminals from escaping the law by staying abroad.

(v) Public Sector Banks (PSBs) have been advised to collect certified copies of passports from promoters/directors and other authorised signatories of companies that take loans of more than Rs. 50 crore

(vi) RBI has introduced the Prudential Framework for the resolution of stressed assets to help banks identify, report, and resolve stressed assets. It also offers benefits to banks if they resolve bad loans quickly, encouraging faster action.

(vii) RBI has instructed banks to report deficient third-party services such as legal search reports, property valuers’ reports, etc. and cases where these service providers collaborate with fraudsters to the Indian Banks’ Association, which keeps a caution list of such unreliable entities.

(viii) The Indian Cyber Crime Coordination Centre has introduced the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS) portal, where people can report financial fraud and stop fraudsters from stealing money. As of January 2025, the system has helped recover over Rs.3,919 crore across more than 11.20 lakh complaints.

(ix) The Cyber Fraud Mitigation Centre (CFMC) has been set up at the Indian Cyber Crime Coordination Centre (I4C). It includes representatives from major banks, financial institutions, payment service providers, telecom companies, IT firms, and state/UT law enforcement agencies. Their goal is to work together efficiently and take quick action to combat online financial crimes.

(x) Seven Joint Cyber Coordination Teams (JCCTs) have been set up to improve coordination among law enforcement agencies (LEAs) during cybercrime investigations. It focuses on operational cooperation in parallel investigations in various States/UTs.

(xi) The National Cyber Forensic Laboratory has been established as a facility for analyzing and investigating cybercrimes using the latest digital technology. It aims to support law enforcement agencies (LEAs) in their investigations.

Due to these measures, RBI data shows that the gross non-performing assets of PSBs have reduced to Rs. 3.02 lakh crore (with an NPA ratio of 2.85%) in December 2024 from Rs. 7.40 lakh crore (with an NPA ratio of 11.59%) in March 2019. Additionally, the slippage ratio has decreased from 3.96% to 0.95% over the mentioned period.