Fewer bank fraud cases occurred in FY26 but involved substantially larger amounts, latest RBI data showed.

The total fraud amount surged 46% to Rs 48,021 crore from Rs 32,803 crore in FY25 and Rs 11,013 crore in FY24, touching a three-year high in value terms. 

The number of bank fraud cases, however, dropped sharply to 10,114 incidents from 23,722 in FY25 and 35,800 in FY24, according to the Reserve Bank of India’s (RBI) annual report released on Friday.

Public sector banks (PSBs) continued to lead the fraud amount at Rs 35,709 crore in FY26, accounting for nearly three-fourths of the industry total. In terms of cases, they reported 5,418 incidents, or 53.6% of the total.

For PSBs, the average fraud value stood at around Rs 6.6 crore per case, as they probably showed continued exposure to large-ticket corporate and credit-related frauds.

Although the share of PSBs in total number of bank fraud cases has been declining, in value terms this has increased to 74.5% in FY26 from 72% a year ago.

For private sector banks, the fraud cases have moderated sharply over the last two years, after accounting for nearly 67% of the total when they reported nearly 24,000 incidents in FY24.

The number of fraud cases for private banks declined to 3,956 in FY26 while the total amount involved stood at Rs 11,399 crore, accounting for 23.7% of the total value.

Loan frauds is a matter of concern as at Rs 40,774 crore from 8,640 cases it accounted for nearly 85% of the total amount in FY26. 

While in FY25 advances-related frauds at Rs 27,364 crore made up 83% of the total amount from 4,549 cases, they accounted for nearly 95% of the value in FY24 involving Rs 10,461 crore from 4,069 incidents.

Card, internet and digital payment frauds declined sharply to 293 cases in FY26 from 13,332 in FY25 and 28,836 in FY24.

Counterfeit notes

According to the RBI, the total number of fake notes detected in the banking system increased to 2,29,746 pieces in FY26, up 5.7% from 2,17,396 a year ago.

This was led by a sharp rise in counterfeit Rs 500 and Rs 20 notes.

RBI is exploring a ‘kill switch’ for debit transactions to prevent any potential digital fraud, if the customer suspects it.

“The introduction of a switch-on and switch-off facility for all digital payment modes shall be explored along with a ‘kill switch’ to block all debits from the account in one stroke. This facility would help bolster consumer confidence and contribute towards controlling fraud in digital payment transactions,” RBI said.