There Have Been 6.3 lakh UPI Fraud Incidents Totalling INR 485 cr so Far in FY25

As of September 2024, 6.32 lakh cases of UPI payment scams totalling INR 485 crore had been registered nationwide, according to RBI data. In FY24, there were 13.42 lakh UPI fraud instances, involving around INR 1,087 crore, a significant increase from FY23's INR 573 crore. In FY 2023-24, the RBI reported that 'financial scams' cost Indians INR 2,715 crore, with each case involving sums of INR 1 lakh or more. Pankaj Chaudhary, the Minister of State (MoS) for Finance, presented the information to the Lok Sabha on 25 November.

The amounts involved in fraud cases in commercial banks and all Indian financial institutions decreased in FY24 from FY23, when they stood at INR 3,607 crore, according to Reserve Bank of India (RBI) data on financial frauds based on the date of occurrence and the amount involved of INR 1 lakh and above in each case, MoS Chaudhary said. According to the minister, there has been a decrease in financial fraud during the last three years. In FY 2021–2022, there were financial scams of INR 9,298 crore.

Tamil Nadu Tops the List

With 6,468 financial fraud instances totalling INR 663.63 crore in FY24, Tamil Nadu recorded the most, followed by Maharashtra with INR 391.78 crore and Karnataka with INR 243.43 crore. The amount engaged in frauds has decreased over the years as a result of extensive measures implemented to prevent financial frauds and discourage scammers, Chaudhary stated.

According to the minister, the RBI released updated master directions on "fraud risk management" in commercial banks and All India Financial Institutions (AIFIs) in July 2024 after reviewing previous master directions, circulars, and new challenges. In addition to highlighting the necessity of establishing a strong internal audit and controls framework, these also mandate a framework on early warning signals and red flagging of accounts, strengthen the board's role in governance and oversight of fraud risk management, and create a dedicated data analytics and market intelligence unit in banks.

Central Payment Fraud Information Registry (CPFIR)

According to the minister, the RBI has been using the Central Payment Fraud Information Registry (CPFIR), a web-based mechanism for reporting payment-related crimes, since March 2020 in an effort to stop frauds arising from UPI transactions. Payment-related scams must be reported to the aforementioned CPFIR by all regulated enterprises (RE).

The government and regulatory agencies have put in place measures like device binding, which links a customer's mobile number to the device; two-factor authentication via PIN; a daily transaction cap; and restrictions on use cases, among others, to stop payment-related frauds, including UPI transaction frauds.

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