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Highest cases of card payment frauds in Maharashtra: RBI data

In terms of both the number of frauds and the amount involved in such frauds, Maharashtra exceeds all other states.

Maharashtra has by far the highest number of digital payment frauds in India, and the RBI is running awareness campaigns towards consumer protection against such frauds, according to the government in Parliament on December 6.

The government was responding to two questions in the Lok Sabha asking whether it has data on the scale of digital payment frauds in India and about the efforts being undertaken to curb them.

As digital payments grow aggressively in India, the number of frauds is also increasing steadily, with the RBI receiving more and more complaints about digital fraud. Timely regulatory action at this stage could be crucial to protecting vulnerable Indians from getting defrauded.

What is the scale of digital payment fraud in India?

In response to a question on cyber financial frauds, the Ministry of Finance released state and bank-wise fraud data obtained by the RBI:

  • Which state has the highest fraud rates? In terms of both the number of frauds and the amount involved in such frauds, Maharashtra exceeds all other states by a significant margin. The country has seen 26, 522 cases of fraud in the last financial year, involving a total amount of 67 crores. The next highest number was in Delhi, with a total of 7,774 reported cases. Other states with high numbers of reported fraud include Gujarat, Haryana, Karnataka, and Tamil Nadu.
  • Which banks have reported the most fraud? In the past few years, Kotak Mahindra Bank has reported a remarkably high number of digital payment frauds, with 45,760 reported cases in FY2020-21. Other banks with high cases of fraud include HDFC Bank and Axis Bank.

What RBI has done to curb digital payment fraud

An unstarred question in the Lok Sabha asked the Ministry of Finance about digital frauds:

Whether the Government is also aware that the cases of digital fraud are also increasing in the country due to increasing use of digital payment; and if so, the details thereof along with the corrective steps taken by the Government in this regard?

In response to the question, the Ministry of Finance detailed measures that RBI has taken over the years to prevent digital payment fraud:

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  • Card security: RBI has prescribed security controls to banks such as:
    1. Ensure all active cards are EMV Chip and Pin-based.
    2. Secure the bank card payment infrastructure.
    3. Implement security controls at Hardware Security Modules (HSM)
  • Grievance redressal: Ensuring that customers have 24×7 access through multiple channels (at a minimum via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorised transactions or loss or theft of card.
  • Awareness campaign: RBI is running the awareness campaign under the banner of ‘RBI Kehta Hai’ aiming to spread awareness about:
    1. Not sharing password/pin/OTP received through SMS.
    2. Acting swiftly on alerts received on unauthorized transactions
    3. Registering mobile number with bank for instant alerts
    4. Not storing important banking data in mobile.
    5. Using only verified, secure and trusted website.
    6. Avoiding banking transactions on free networks,
    7. Changing PIN regularly.
    8. Blocking ATM card, Credit Card and prepaid card immediately if lost or stolen

Banks issuing more debit, credit cards after pandemic hit

While challenges remain in the security of card transactions, the rate at which banks are issuing cards seems to be recovering, according to RBI data. Between May 2020 and June 2021, India added around 5.5 million new credit cards and 60.6 million new debit cards, the data revealed.

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