The rising volumes of UPI transactions and related frauds have emerged as a major challenge for the banks
New Delhi, NFAPost: Taking stock of the rise in the number of digital frauds, the Reserve Bank of India has directed banks to report all kinds of financial frauds and only those above Rs one lakh, Financial Express (FE) has reported.
The central bank has registered a rise in online fraud in the banking system and intends to evaluate the arrangements banks have put in place to avert such incidents, the newspaper cited people aware of the development.
Elaborating on the subject, a senior official with a public sector bank told FE, “RBI has enhanced its attention in this area. The quantum is less (in digital frauds), but the volumes are rising with UPI (Unified Payments Interface) coming into the picture.”
RBI’s financial year report for 2023 (FY23) said that the overall value of frauds reported by the Indian banks has registered a 50 per cent decline from Rs 59,819 crore in FY22 to Rs 30,252 crore. This is when the volume of card usage and online transactions has doubled. While the numbers may look encouraging at first glance, they also raise concerns about the fraud reporting methodology banks are using.
Bankers told FE that RBI is asking banks to inform them of the mechanism they are using to prevent transaction-related fraud. Moreover, the RBI has also asked banks about the type of customer services they are providing to the victims of such frauds, the report added.
Another senior bank official said that not all customers are careful while conducting online payments and it is imperative on banks’ part to conduct customer awareness campaigns.
Banks officials quoted above said that different banks were following set of rules to identify and report financial frauds. It is because of this reason that the RBI has asked banks to report all types of frauds and not just those above Rs 1 lakh.
