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New Delhi
Indian Minister of State for Finance Pankaj Chaudhary told the country's parliament that there has been a significant increase in financial fraud cases during the last five years. According to data from the Reserve Bank of India (RBI), there has been a marked rise in fraud incidents involving credit cards, ATM or debit cards, and internet banking.
The number of reported fraud cases has skyrocketed from 2,677 in the financial year 2019-20 to an alarming 29,082 in 2023-24. This shows a staggering 986 per cent increase.
What does it mean?
It simply shows fraudsters' growing sophistication and exposes vulnerabilities within the financial system.
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At the same time, it also points to an urgent need for enhanced security measures as well as public awareness to protect individuals and the financial system at large.
What is the financial impact of these frauds?
The financial impact of these frauds has been equally concerning. The total amount involved surged from ₹129 crore ($15.4 mn) in FY 2019-20 to ₹1,457 crore ($173.9mn) in FY 2023-24, marking a dramatic increase of 1,068 per cent.
Despite some progress in recovering funds, these efforts have not kept pace with the scale of fraud. The amount recovered increased from ₹12 crore ($1.43mn) in FY 2019-20 to ₹139 crore ($16.59 mn) in FY 2023-24, an improvement of 1,058 per cent.
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But the recovery rate remains relatively low, with only 9.5 per cent of the total fraudulent amounts being reclaimed in the most recent financial year, up slightly from 9.3 per cent five years ago.
Among the various types of financial fraud, those involving the Aadhaar Enabled Payment System (AePS) have been particularly problematic. These frauds often involve the compromise of Aadhaar numbers and biometric data, leading to unauthorised transactions.
(With inputs from agencies)