Page 43 - Banking Finance August 2025
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ARTICLE
Looking ahead, physical security in banking is expected confidence, reassures regulators, and strengthens
to become smarter, modular, and more responsive. The institutional credibility. As we move deeper into the digital
goal is to ensure that security infrastructure, whether for era, physical security must be seen not as an outdated
a new branch in a rural location or an upgrade in a metro practice, but as a strategic pillar supporting the foundation
city is scalable and compliant. It should support real-time of modern banking.
decision-making while aligning with operational efficiency
goals. In the end, while apps, APIs, and AI shape the future of
transactions, physical infrastructure remains the silent
This evolution isn't just about technology, it's about building enabler, guarding assets, ensuring compliance, and
trust. A secure banking environment enhances customer upholding trust across the financial system.
Number of bank frauds increased threefold in FY25, but amount
dipped
The number of fraud cases in the banking sector more than tripled to 23,953 in 2024-2025 (FY25) from 7,359 in FY21.
Despite this increase, the amount involved declined by almost 74 per cent to ?36,014 crore, indicating a more frequent
occurrence of low-value frauds.
The amount involved in frauds related to loan accounts saw a sharp decline in FY25, according to Reserve Bank of
India (RBI) data. At the same time, the number of frauds related to credit/debit cards and internet banking rose over
five times in FY25.
Following a sharp rise in the Indian corporate sectors large-value non-performing loans in the previous decades, banks
have become cautious in lending to companies while tightening credit appraisal process.
Banks have increased their focus on retail loans and beefed up digital banking. In the past five years, private sector
banks reported more frauds, while public sector banks contributed the most to the fraud amount. This came as private
banks were more aggressive in retail lending.
The RBI said data for FY25 includes 122 fraud cases amounting to Rs. 18,674 crore, which were reclassified and reported
afresh in the current year after re-examination and ensuring compliance with the Supreme Courts judgment dated
March 27, 2023. This was the reason the amount for fraud incresed in FY25 after a continuous decline in the previous
four years.
According to the RBI, classification of fraud is mainly based on the provisions of the Indian Penal Code (IPC). Some
areas of fraud include misappropriation and criminal breach of trust, fraudulent encashment through forged
instruments, manipulation of books of account or through fictitious accounts, and conversion of property, among others.
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