Bank frauds involving cards, internet, cash rise in six months

According to Reserve Bank of India (RBI) data, 2,331 fraud cases involving Rs 87 crore were reported by banking entities during the six-month period as against 1,532 frauds involving Rs 60 crore.

During 2021-22, the average amount of fraud decreased substantially. “Based on the date of occurrence of frauds, advances-related frauds formed the biggest category prior to 2019-20. Subsequently, however, in terms of number of frauds, the modus operandi shifted to card or internet- based transactions,” the RBI’s Report on Trend and Progress of Banking in India.

Additionally, cash frauds are also on the rise. Banks reported 589 frauds involving Rs 81 crore in cash-related issues during the six-month period September 2022 as against 245 frauds involving Rs 51 crore in the same period of last year.

The RBI said total frauds, including advances, forex, inter-branch accounts, deposits and off-balance sheet items, came down to 5,406 cases involving Rs 19,485 crore during the six-month period as against 4,069 cases for Rs 36,316 crore.

According to the RBI, the number of fraud cases reported by private banks outnumbered those by PSU banks for the second consecutive year in 2021-22. In terms of the amount involved, however, the share of PSBs was 66.7 per cent in 2021-22, as compared with 59.4 per cent in the previous year.

Fraudsters create a third-party phishing website which looks like an existing genuine website, such as a bank’s website or an e-commerce website or a search engine. Links to these websites are circulated by fraudsters through SMS, social media, email and Messenger. Many customers click on the link without checking the detailed Uniform Resource Locator (URL) and enter secure credentials such as PIN, One Time Password (OTP) and password which are captured and used by the fraudsters.

Imposters call or approach the customers through telephone call, social media posing as bankers, company executives, insurance agents and government officials. To gain confidence, imposters share a few customer details such as the customer’s name or date of birth. Fraudsters install skimming devices in ATM machines and steal data from the customer’s card. Fraudsters may also install a dummy keypad or a small pinhole camera, well-hidden from plain sight to capture ATM PIN.

Meanwhile, to streamline reporting, enhance efficiency and automate the payments fraud management process, the RBI said the fraud reporting module is being migrated to DAKSH – Reserve Bank’s Advanced Supervisory Monitoring System. The migration will be effective from January 01, 2023. Entities should commence reporting of payment frauds in DAKSH from this date.

In addition to the existing bulk upload facility to report payment frauds, DAKSH provides additional functionalities, viz. maker-checker facility, online screen-based reporting, option for requesting additional information, facility to issue alerts / advisories, generation of dashboards and reports, the RBI said.

All RBI authorised payment system operators (PSOs), providers and payment system participants operating in India are required to report all payment frauds, including attempted incidents, irrespective of value, either reported by their customers or detected by the entities themselves. “This reporting was earlier facilitated through Electronic Data Submission Portal (EDSP) and is being migrated to DAKSH,” it said.