The Chairman of the Indian Banks’ Association (IBA) underlined on June 3 that most bank frauds highlighted by the recent RBI annual report are third-party scams.
According to M V Rao, the Chairman of the IBA, the significant rise in bank frauds reported in the RBI’s annual reports is primarily attributed to customers falling victim to scams orchestrated by third parties, rather than vulnerabilities in banking systems. Rao emphasized the importance of raising awareness about early reporting, particularly within the critical ‘golden hour’, to effectively tackle these fraudulent activities.
As per the RBI‘s annual report, fraud cases surged to 36,075 in FY24, marking a significant rise from 13,564 reported in the previous fiscal year. The report highlighted that a majority of these frauds, in terms of volume, were related to digital payments, including card and internet transactions.
“When you look into the root cause of these frauds, it’s not that they are committed by breaching bank systems, but rather someone has perpetrated the fraud on the bank’s customers. So, at the end of the day, my customer has lost. Ultimately, it is up to the bankers and the industry to see how we can protect the customer’s interests,” Rao said.
Rao made these observations while speaking at the launch of an online ‘bank clinic’ by the All India Bank Employees’ Association of India. He emphasised the importance of advising customers to address grievances with their banks. He stressed the clinic’s role in raising awareness, particularly regarding the urgency in addressing digital frauds.
He took note of the government’s initiatives, such as the National Cyber Crime Reporting Portal and the national cyber crime helpline ‘1930’, aimed at reporting cyber frauds.
In addition to offering guidance to customers on how to proceed with their concerns, the bank union plans to address customer issues directly with the bank’s management. C H Venkatachalam, the general secretary of AIBEA, mentioned during the event that the resolution of employee matters and wage revisions through the 12th bipartite wage negotiation has afforded the union more bandwidth to prioritise customer issues.
