Online Fraud Cases Surged 334% YoY In FY24, Says RBI

The number of online frauds in the country surged 334% year-on-year (YoY) to 29,082 in the financial year 2023-24 (FY24). 

The disclosures were part of the Reserve Bank of India’s (RBI) annual report for the fiscal year ended March 2024 and covered instances involving cards and the internet. In contrast, online frauds in the country stood at 6,699 in FY23. 

As per the report, the amount involved in these cases surged to INR 1,457 Cr in FY24 from INR 227 Cr in the previous year. 

“Frauds have occurred predominantly in the category of digital payments (card/internet), in terms of number. In terms of value, frauds have been reported primarily in the loan portfolio (advances category). While small value card/internet frauds contributed the maximum to the number of frauds reported by the private sector banks, the frauds in public sector banks were mainly in loan portfolios,” the report stated. 

The report also outlined that fraud cases in the banking sector skyrocketed nearly 166% YoY to 36,075 in the year ended March 2024 from 13,564 in FY23. Meanwhile, these frauds accounted for a cumulative sum of INR 13,930 Cr during the period under review, down 46.7% from FY23’s INR 26,127 Cr.

An analysis of the frauds reported during FY23 and FY24 shows a significant time lag between the date of occurrence of a fraud and its detection. 

In 2022-23, 94% of the money involved in reported frauds came from frauds that happened in earlier years. Likewise, in 2023-24, 89.2% of the money involved in fraud was from incidents that occurred in previous years.

This comes at a time when the RBI as well as the government has been taking steps to crack the whip on online frauds. Just last month, the Centre held deliberations with fintech startups and law enforcement agencies to collaborate and address challenges related to digital financial fraud.

In April, it was reported that the Ministry of Home Affairs was working with SBI and some telcos to develop a solution to alert about stolen one time passwords (OTP) to combat phishing attacks. 

In February, markets regulator SEBI also issued an advisory that alerted investors against practices employed by fraudulent trading platforms to lure customers such as online courses, seminars and mentorship programmes. 

Additionally, the RBI was also said to be planning to set up the Digital India Trust Agency to check illegal lending apps, earlier this year.