The Number of Card And Net Banking Frauds in India Totalled 1,785 In 2017

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It has not been long since the Panjab National Bank (PNB) fell victim to India’s biggest bank fraud involving alleged embezzlement of funds worth nearly Rs 1.8 billion (about Rs 11394 Cr). Famous jewellers Nirav Modi and his uncle Mehul Choksi, being the main culprits, were indicted after they were off-bounds. Yet a new finding has revealed credit/debit cards and net banking frauds in India is still one of the biggest concerns for the banking industry.

A total of 1,785 cases, each amounting to Rs 1 Lakh or more, related to credit/debit cards and net banking frauds in India, were reported last year.

In a written reply to Rajya Sabha, KJ Alphons – Minister of State for Electronics and IT, said that the extent of losses in these fraud cases reached to Rs 71.48 crore in 2017.


187 cases of fraudulent activities, with losses touching Rs 33.73 crore, were reported in December 2017 alone. The minister explained that despite the fact that loss seems to be quite significant, it equals to mere 0.009% of the total value of transactions. The number of transactions that took place at ATM and POS terminal amounted to approx Rs 3469.97 billion (Rs 3,46,997 crore).

However, Mr Alphons has assured that RBI is leaving no stone unturned to make the online payments more secure by employing risk mitigation measures.

Among all the states Maharashtra topped the list of credit/debit card and net-banking related frauds for FY 2016-17 with 380 cases amounting Rs 12.10 Cr.

Alphons said, as per the data provided by RBI, 30,222 incidents reported, during October-December months of 2017, were related to phishing/vishing, compromise of user credentials and mobile phone numbers, and OTP compromise. He added that 16,128 similar incidents were reported in June 2017 quarter and which has increased to 20,753 in the following quarter.

In the wake of these embezzlement crimes, financial authorities and payment system operators have been advised to enhance the security and employ mitigation measures for the card-based online transactions.


These incidents have put a dark spot on the Indian Banking authorities. The common man’s financial freedom is being compromised. The information available till now highlights failures at different levels – internal controls, poor regulatory capabilities, corporate governance and the unaware masses.

Perhaps, Bank shouldn’t overlook the potential threats caused by such fraudulent activities. A research by IIM-B, titled “Frauds in Indian Banking Industry“, has proposed recommendations to reduce future occurrences of frauds in Indian banking sector. The paper suggests that banks should set up a special fraud monitoring department with experts trained in fraud detection. Also, banks should take a strong stand on the Non-performing Assets (NPAs), especially PSBs (Public sector Banks). The NPAs can be risky; apart from causing global and domestic slowdown, there are some pieces of evidence found on the relationship between frauds and NPAs as well.

The efficiency of country’s Banking and financial system is a direct indicator of well-being and living standards of its citizens. India’s economy, as well as its citizens, are suffering to a great extent from such financial setbacks.

Radical use of technology in this regard can be a game changer.

The government and RBI should not let this crisis go waste but improvise and use this opportunity to strengthen the current banking system.


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