Banking sector frauds have become a big concern in India posing a significant threat to the financial stability of the nation. Recent years have witnessed a search in fraudulent activities within the bank industry exposing vulnerability in raising concerns about the efficacy of the existing regulatory frameworks. In 2022-2023 year-on-year, the amount of fraud cases soared upto Rs. 30,252 crore, according to the Reserve Bank of India data. Moreover, a fraud of Rs. 59,819 crore has taken place in 2021-21 itself. The data further showed that most of the payments are done digitally in forms of card UPI, or net banking payments.
These incidents involve both private and public banks, with staggering amounts being siphoned off through fraudulent means. Instances of loan defaults, money laundering, diversion of funds and other sophisticated techniques employed by fraudsters have emerged leaving the banking sector and regulatory authorities deeply concerned.
Several factors contribute to this growth such as weak internal controls, inadequate risk management systems, collusion between Bank officials and borrowers and out it a technology instruction among the key reasons sighted by the vulnerability of the banking sector. This impacts that extends on financial losses and their trust in the banking system and hinder economic growth.
To come back to such secret fraud effectively a comprehensive approach should be taken by the government authorities. A strong risk management culture and increased transparency are among the things that western and technologically advanced teachers are advocating in banking officials. Collaboration between banks regulators law and force and agent season other stakeholders is also crucial to strengthen the preventive and remedial measures against Fraud Concerns.