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Bank fraud amount surges to Rs 48,021 crore in FY26; digital payment frauds decline: RBI
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The total amount involved in bank frauds rose sharply in FY2025-26 despite a steep decline in the number of reported cases, with loan-related frauds accounting for nearly 85 per cent of the overall amount involved during the year.
The amount involved in bank frauds jumped to Rs 48,021 crore in FY2025-26 from Rs 32,803 crore in the previous year even as the number of reported fraud cases declined significantly, according to the Reserve Bank of India’s Annual Report 2025-26.
The RBI data showed fraud cases of Rs 1 lakh and above fell to 10,114 in FY26 compared with 23,722 in FY25 and 35,800 in FY24. However, the amount involved rose sharply, driven primarily by a surge in frauds linked to advances and lending operations.
Loan-related frauds dominated the banking fraud landscape during FY26, accounting for Rs 40,774 crore, or nearly 85 per cent of the total amount involved across all fraud categories. The number of fraud cases in the advances segment also increased to 8,640 in FY26 from 7,924 in FY25, indicating that credit-related frauds remained the most significant source of financial exposure for banks.
Public sector banks accounted for the bulk of fraud amounts during the year. Fraud cases involving public sector banks amounted to Rs 35,709 crore in FY26, representing around 74.5 per cent of the total amount involved across the banking system. While the number of fraud cases reported by public sector banks declined to 5,418 from 6,916 a year earlier, the amount involved rose sharply from Rs 23,617 crore in FY25.
Private sector banks reported frauds amounting to Rs 11,399 crore in FY26 against Rs 8,927 crore in FY25. The number of fraud cases in private banks, however, dropped sharply to 3,956 from 14,024 during the same period.
The RBI data indicated a major shift in the composition of frauds over the last three years. While card, internet and digital payment frauds accounted for the highest number of fraud cases during FY24 and FY25, the advances category emerged as the dominant segment in FY26 both in terms of number of cases and amount involved.
Digital payments frauds decline
Digital payment-related frauds saw a steep decline during FY26. Fraud cases under the card, internet and digital payments category fell to just 293 cases from 13,332 in FY25 and 28,836 in FY24. The amount involved in such frauds also declined sharply to Rs 29 crore in FY26 from Rs 517 crore in the previous year and Rs 1,452 crore in FY24.
The deposits category accounted for frauds amounting to Rs 377 crore in FY26, while frauds linked to off-balance sheet transactions stood at Rs 521 crore. Fraud amounts under forex transactions rose to Rs 125 crore during the year from Rs 16 crore in FY25.
The RBI also reported a sharp rise in frauds classified under the “others” category, where the amount involved surged to Rs 6,063 crore in FY26 compared with Rs 971 crore in FY25.
Among other banking categories, foreign banks reported frauds amounting to Rs 290 crore during FY26, while small finance banks reported Rs 114 crore and payments banks reported Rs 11 crore.
The central bank clarified that frauds reported during a particular year may relate to incidents that occurred several years earlier. It also said the amount involved in fraud cases does not necessarily represent the actual loss incurred by banks, as recoveries may subsequently reduce the final loss amount.
The annual report further noted that FY26 data included fresh fraud classification in 314 cases amounting to Rs 30,199 crore pertaining to previous financial years. These cases were reported afresh after re-examination and ensuring compliance with the Supreme Court’s judgement dated March 27, 2023.
The RBI data highlighted that despite improvements in fraud detection and reduction in the number of cases, large-value loan-related frauds continue to pose a major challenge for the banking sector, particularly for public sector lenders with larger exposure to corporate and advances portfolios.
