Bank frauds linked to cards, internet, cash increase in six months

Card and Internet-related banking fraud increased in the six-month period ending September 2022 amid rapid progress in digitization.

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

During 2021-22, the average amount of fraud has decreased significantly. “Based on the date of occurrence of the frauds, advance payment frauds constituted the largest category till 2019-20. Later, however, in terms of the number of frauds, the mode of operation shifted to card-based or internet-based transactions,” RBI Report on Trend and Progress in Banking in India.

In addition, money frauds are also increasing. In the six-month period to September 2022, banks reported 589 frauds involving cash withdrawal problems of Rs 81 crore, compared to 245 frauds of Rs 51 crore in the same period last year.

The RBI said total fraud, including advances, foreign exchange, inter-branch accounts, deposits and off-balance sheet items, fell to 5,406 cases involving Rs 19,485 crore during the six-month period, against 4,069 cases of Rs 36,316 crore.

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

Fraudsters create a third-party phishing website that looks like an existing real website, such as a bank website or an e-commerce website or search engine. Links to these sites are shared by scammers via 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 detected and used by fraudsters.

Fraudsters call or approach customers through phone calls, social media, posing as bankers, company executives, insurance agents and government officials. In order to gain trust, scammers share a few pieces of customer information, such as the customer’s name or date of birth. Fraudsters install skimming devices in ATMs and steal data from the customer’s card. Fraudsters can also install a fake keypad or pinhole camera well hidden from view to capture an ATM PIN.

Meanwhile, to streamline reporting, increase efficiency and automate the payment fraud management process, the RBI said the fraud reporting module is being migrated to DAKSH, the Reserve Bank’s Advanced Supervisory Monitoring System. The migration will take effect on January 1, 2023. Organizations must start reporting payment fraud to DAKSH from today.

Apart from the existing bulk upload facility for reporting payment frauds, DAKSH provides additional features viz. creator-verifier, online screen-based reporting, option to request additional information, facility to issue alerts/advisories, generation of dashboards and reports, RBI said.

All RBI-authorized Payment System Operators (PSOs), providers and payment system participants operating in India are required to report all payment fraud, including attempted incidents, regardless of value, reported by their customers or detected by their organizations. : “This reporting was earlier facilitated through Electronic Data Submission Portal (EDSP) and is being migrated to DAKSH,” it said.


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