QUAID NAJMI

Pune, March 19,2023:The growing popularity of digital payments in India is proving to be a blessing not only for the common man but also the cyber-conmen, as per the latest figures revealed by RBI under RTI.

The RTI reply was given to Pune businessman Prafful P. Sarda, who had sought official details of all types of online-digital-cards frauds that Indian banks have suffered with invisible conmen duping lakhs of gullible customers since 2014.

“The RBI’s reply was revealing and unnerving…Just as the digital economy is soaring, the fraudsters and scamsters on the prowl in the virtual world are becoming bolder,” said Sarda.

From January 2014 till December 2022, Indian banks have reported a total 1,40,736 frauds involving bank ATM/Debit Cards (scams of Rs 507.12 crore); Credit Cards 1,37,237 cases involving Rs 514.90 crore; and 61,561 Internet Banking scams of Rs 354.78 crore.

The growing annual figures for all these forms of convenience banking are stunning, said Sarda.

From just 71 ATM/Debit Cards frauds in 2014-2015, it peaked to 36,978 in 2019-2020, with amounts shooting up from Rs 1.51 crore to Rs 102.13 crore in the same period. This has now come down to 7,395 frauds worth Rs 29.21 crore (2022-2023).

For Credit Cards, there were 119 scams in 2014-2015 involving an amount of Rs 3.41 crore, which peaked to 26,580 in 2019-2020 with the amount touching Rs 74.69 crore.

However, in Credit Cards, the numbers came down to 20,017 frauds with a higher amount Rs 93.89 crore lost (2022-2023), indicating that the conmen are ‘getting smarter’.

As far as Internet Banking goes, there were 42 frauds worth Rs 2.20 crore (2014-2015), which topped to 20,476 with amounts lost touching Rs 86.66 crore in (2020-2021). This has dropped to 8,121 instances involving Rs 69.96 crore (2022-2023).

“The figures indicate that despite the best efforts of the RBI, the banks and other agencies, Credits Cards remain the most vulnerable to frauds, followed by ATM/Debit Cards and Internet Banking,” Sarda pointed out.

Additionally, based on offsite returns data provided by supervised entities, there were a staggering 2,99,765 cyber frauds involving Debit Cards/Credit Cards, with an amount of Rs 322.92 crore lost (2020-2021); the instances came down to 2,21,705 but a higher amount of Rs 392.54 crore was gone (2021-2022); and the scams dropped to 65,271 with an amount of Rs 162.15 crore lost (April 2022 – September 2022 period).

Similarly, digital payments cyber frauds for Debit Cards, Credit Cards and UPI payments were 4,49,684 with Rs 636.12 crore siphoned off (2020-2021); 3,59,791 scams with the amount lost shooting up to Rs 816.40 crore (2021-2022); and frauds dropped by over 50 per cent, 148,887 instances with Rs 418.31 crore lost (April 2022 – September 2022 period).

The RBI said it had taken a series of measures to arrest these frauds with at least 16 circulars or advisories to banks, directing them to initiate suitable remedial steps to prevent such frauds.

The regulator has also suggested strong Self Regulatory Organisation for Payment System Operators, Additional Factor of Authentication, Mandatory PIN Authentication, Alert Systems, Only Domestic Card Usage Mechanism, Immediate Incident Reporting Mechanism, Risk Mitigation Measures and Two Factor Authentication to check such scams.

Sarda said that while the government’s measures are indeed “laudable”, the official RTI data indicates that there is scope for more to ensure that “the banks always remain a step ahead of the online swindlers” so that the money or the ordinary people is safe and secure during digital transactions.