The country has reported 6.32 lakh cases of UPI payment frauds worth ₹485 crore as of September 2024, according to the RBI data. There were 13.42 lakh UPI fraud cases in FY24, in which around ₹1,087 crore were involved, a huge spike from ₹573 crore in FY23.
Besides, Indians lost ₹2,715 crore to 'financial frauds' involving amounts of ₹1 lakh or more per case in FY 2023-24, according to the RBI data. The information was shared by Minister of State (MoS) Finance Ministry Pankaj Chaudhary in the Lok Sabha today.
As per Reserve Bank of India (RBI) data on financial frauds in respect of the amount involved of ₹1 lakh and above in each case and based on the date of occurrence, amounts involved in the fraud cases in commercial banks and all Indian financial institutions declined in FY24 from FY23 when it stood at ₹3,607 crore, MoS Chaudhary stated. The minister said the number of financial frauds has been declining in the past three years. There were financial frauds worth ₹9,298 crore in FY 2021-22.
In FY24, Tamil Nadu reported the highest number of 6,468 financial fraud cases worth ₹663.63 crore, followed by Maharashtra at ₹391.78 crore and Karnataka at ₹243.43 crore. "Comprehensive steps have been taken to keep a check on the banking frauds and deter fraudsters, which resulted in a decline in the amount involved in frauds over the years," he said.
The minister said that based on a review of the earlier master directions, circulars and emerging issues, the RBI in July 2024 issued revised master directions on "fraud risk management" in commercial banks and AIFIs. These strengthen the role of the board in governance and oversight of fraud risk management; emphasise the need for instituting a robust internal audit and controls framework; and mandate framework on early warning signals and red flagging of accounts and establish dedicated data analytics and market intelligence unit in banks.
UPI Frauds
To curb frauds emerging from UPI transactions, the minister said the RBI has implemented the Central Payment Fraud Information Registry (CPFIR), a web-based payment-related fraud reporting tool since March 2020. All the regulated entities (RE) are required to report payment-related frauds to the said CPFIR.
In order to prevent payment-related frauds including UPI transaction frauds, the government and the regulatory bodies have implemented initiatives including device binding between the customer's mobile number and the device; two-factor authentication through PIN; daily transaction limit; and limits and curbs on use cases etc.
