Bank Fraud Tally Shrinks, But Losses Rise to Rs 48,021 Crore in FY26: RBI

India's banking sector witnessed a sharp decline in the number of reported fraud cases during 2025-26 , but the total amount involved rose significantly, highlighting a growing concentration of fraud in high-value transactions, particularly in the lending segment.

According to the Reserve Bank of India (RBI) Annual Report 2025-26 , banks and financial institutions reported 10,114 fraud cases involving Rs 48,021 crore during the fiscal year, compared with 23,722 cases worth Rs 32,803 crore in 2024-25. The figures indicate that while fraud incidents nearly halved, the financial impact increased substantially.

The RBI noted that both public sector banks (PSBs) and private banks recorded a decline in the number of fraud cases over the past three years. However, the amount involved in these frauds has continued to rise.

PSBs reported 5,418 fraud cases in FY26, down from 6,916 in the previous year. Despite the decline, the value of frauds surged to Rs 35,709 crore , compared with Rs 23,617 crore in FY25 and Rs 8,092 crore in FY24. Private sector banks also saw fraud cases fall sharply to 3,956 from 14,024 a year earlier, while the amount involved increased to Rs 11,399 crore from Rs 8,927 crore.

A key trend identified in the report is the dominance of the advances category , which accounted for the largest share of frauds in FY26. Banks reported 8,640 loan-related fraud cases involving Rs 40,774 crore , up from Rs 30,367 crore in the previous year. Such cases typically involve diversion of loan funds, fake collateral, multiple financing arrangements and misrepresentation of financial information.

In contrast, card, internet and digital payment frauds declined dramatically. Only 293 such cases involving Rs 29 crore were reported during FY26, compared with 13,332 cases worth Rs 517 crore in FY25. The sharp drop suggests stronger cybersecurity controls and improved monitoring of retail digital transactions.

The RBI clarified that FY26 data includes 314 fraud cases amounting to Rs 30,199 crore pertaining to earlier financial years that were reclassified following a re-examination after the Supreme Court's March 2023 judgment on fraud reporting norms.

Although the RBI report does not provide age-wise victim data, studies indicate that senior citizens are increasingly vulnerable to cyber-enabled financial frauds, including digital arrest scams, fake investment schemes and impersonation frauds. Younger users, meanwhile, remain susceptible to phishing attacks, UPI scams and fraudulent investment applications.

To strengthen fraud prevention, the RBI has expanded its "RBI Kehta Hai" awareness campaign and continues to promote safe digital banking practices through public outreach programmes. Customers are encouraged to immediately report cyber financial frauds through the national helpline 1930 or the National Cyber Crime Reporting Portal .

The central bank has also operationalised a Cyber Range platform at the Institute for Development and Research in Banking Technology (IDBRT) to conduct simulated cyberattack drills. In addition, it plans to launch a micro-data analytics project for cyber risk and review its risk-based KYC/AML supervision framework during the current fiscal year.

The latest figures underscore a changing fraud landscape in India's banking system, where retail digital frauds are declining but large-value lending-related frauds continue to pose significant risks.