Page 51 - Banking Finance October 2024

ARTICLE

Frauds in Banking

Sector and Role of

AI in Fraud

Management Chief Manager Faculty
Goutham Gosai

ULA Bhopal
Union Bank of India

The banking sector, a cornerstone of the Indian economy, plays a critical role in driving financial
inclusion and stability. However, it has not been immune to fraudulent practices, which jeopardize
not only the financial institutions but also the trust of the populace.

Introduction frauds saw a substantial decrease of 46.7%, amounting
to Rs 13,930 crore
The banking sector, a cornerstone of the Indian economy,
plays a critical role in driving financial inclusion and sta-
bility. However, it has not been immune to fraudulent Indians lost more than Rs 1,750 crore to cyber crimi-
practices, which jeopardize not only the financial institu- nals in the first four months of 2024 with over 7 lakh 40
tions but also the trust of the populace. Understanding thousand cybercrime complaints being registered on the
fraud perpetrators, their methodologies, and motivations National Cybercrime Reporting Portal run by the minis-
is vital to curtailing these malpractices. This article try of home affairs between January to April 2024. Ac-
delves into the landscape of banking frauds in India, cording to Indian Cyber Crime Coordination Centre
providing insights into why and how they occur and sug- (I4C), on an average 7,000 cybercrime complaints were
gesting robust measures for prevention. registered per day in May 2024, a jump of 113.7%
between 2021-2023 and 60.9% from 2022-2023, and
The Landscape of Banking Frauds in India 85%of them were financial only
Banking frauds in India have been a growing concern,
reflected in increased incidences of large-scale financial These figures, while alarming, underscore the pressing
crimes. According to the Reserve Bank of India (RBI), need for stringent controls and vigilant monitoring.
the financial year 2021-22 witnessed a total of 9,103
Key Perpetrators and Their Methods
frauds involving ?60,389 crore in the Indian banking
sector. Latest RBI report highlights a significant rise in Fraud perpetrators in the banking sector can be broadly
the number of banking frauds to 36,075 in the fiscal year categorized into individuals (internal or external) and
2023-24, marking a year-on-year increase. However, on organized groups. Here's a deeper look into their modus
the positive side, the total amount implicated in these operandi:

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