In the fiscal year 2023, the financial sector in India witnessed a surge in sophisticated scams exploiting evolving technologies, targeting unsuspecting individuals. Despite a decrease from the staggering 1.3 trillion rupees reported in 2021, bank frauds documented by the Reserve Bank of India (RBI) exceeded 302.5 billion rupees (INR 30,000 crore). This reduction signifies a reversal in the trend of escalating bank frauds observed over the past decade. However, the figure remains substantial, urging citizens to exercise caution to safeguard their financial interests.

According to the Microsoft 2021 Global Tech Support Scam Research, 69% of online fraud cases among Indian consumers were reported in 2021. The Reserve Bank of India (RBI) data, although potentially excluding numerous undetected frauds, indicated a total value of scams amounting to 60,414 crore rupees in the fiscal year 2021–2022.

Various fraudulent activities have emerged, including UPI-related scams, enticing schemes promising unrealistic investment returns, QR code scams, part-time job deceptions, and courier scams targeting the youth. Malware-driven cybercrimes and tech support scams further compound the challenges in navigating the financial landscape.

UPI transactions, a significant milestone in digital payments, have become a target for fraudsters who disguise collect requests as fraudulent cashback offers and QR codes, or create spoofed VPAs for refunds and disaster support. Online investment scams lure victims through deceptive websites and mass-invitations via messaging apps like Telegram and WhatsApp, promising reliable investments in stocks, businesses, or cryptocurrencies.

In fiscal year 2023, the banking system reported 13,530 fraud cases, with digital payment-card/internet transactions accounting for nearly 49% (6,659 cases). Particularly concerning was the highest incidence of digital frauds reported in May 2023. UPI fraud cases exceeded 95,000, representing a notable increase from the previous year.

Reports reveal that 55% of all digital payment frauds in India are associated with UPI transactions. Notably, 50% of these scams have an average ticket size of less than Rs 10,000, while 48% fall within the range of $10,000 to $1,000,000, with only 2% involving a ticket worth more than INR 10,00,000.

Identity-related frauds, especially account-related frauds, dominate across industries. Account-related fraud constituted 65% of all frauds in the financial services industry in 2021. The cumulative impact of scams resulted in a staggering financial loss exceeding INR 200 crore in 2023, with a dismal recovery rate of only 2% to 8% of the lost funds.

Despite the decline in documented bank frauds to 3,500 crore rupees in 2023, as reported by the RBI, the prolonged impact of fraud on the financial landscape is evident. Between June 1, 2014, and March 31, 2023, Indian banks detected approximately 65,017 frauds, resulting in a loss of Rs 4.69 lakh crore, highlighting the significant and enduring challenge posed by fraudulent activities in the financial sector.