India’s banking system saw the total value involved in fraud rise to ₹48,021 crore in FY 2025-26, a 46.4% jump over the prior year, even as the number of reported cases fell sharply to 10,114. The Reserve Bank of India’s annual report attributes the high value chiefly to the fresh fraud classification of 314 legacy cases (amounting to ₹30,199 crore) from previous financial years following a Supreme Court directive.
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Public-sector banks absorbed the brunt—₹35,709 crore (74.5%)—largely from large-ticket loan frauds.
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Private banks reported 3,956 incidents involving ₹11,399 crore, accounting for roughly 39% of the total case volume.
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Advances (loans) dominated the overall landscape, making up 84.9% of the total fraud amount (₹40,774 crore), while digital-payment and card frauds saw a steep decline to just 293 cases involving ₹29 crore.
While the volume of reported frauds has more than halved, the growing financial concentration in lending portfolios remains a primary concern for regulators. To combat these risks, the RBI has operationalized its new Cyber Range platform, urging financial institutions to prioritize tighter micro-data analytics, optimized transaction monitoring, and proactive fraud risk management frameworks to shore up public trust in the banking sector.
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The nature of claims is getting complex – Mainly cyber. The Bankers Indemnity Policy wordings are still meeting the traditional banking process. In view of this challenge, the policy is getting endorsed/ added with Cyber crime and Add-On clauses. This complicates the claim admn. It is recommended to review the policy wordings.