Banking Central | Digital banking frauds are rising. How do we stem the tide?

Digtial frauds continue to pose challenges to the banking system.

• SIM swaps and digital arrests are increasing in India
• Nearly 16,000 cyber fraud cases reported at SBI in 2024-25
• RBI urges stronger tech adoption and victim compensation by banks

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Digital arrests to SIM swaps, the list of cybercrimes is growing and getting increasingly diverse. As technology breaks new grounds, criminals remain a step ahead.

In the last fortnight alone, incidents ranging from a SIM-swap fraud in Delhi causing losses of nearly Rs 50,000 to the arrest of 27 “cyberfraud syndicate members” across 10 states point to how sophisticated criminals have become and how wide is the threat landscape.

Perhaps, the most disturbing are the so-called digital arrests, when criminals impersonate law-enforcement or regulatory officials and coerce victims into transferring funds by accusing them of breaking law or threatening to frame them in false case.

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The targeted not just vulnerable seniors but even middle-aged professionals with substantial savings.

In Pune, police are searching a social-media influencer linked to a Rs 10.7 crore digital arrest scam.

Earlier, a 23-year-old engineering student in Bengaluru unwittingly became part of a Rs 7 crore fraud when he shared banking access with a friend. Even the young, who are believed to be tech savvy and more aware, are falling prey to cybercriminal networks.

This isn’t even new. Ever since digital banking started, criminals have struck with ease, something even advances in technology and risk management systems has not been able to curb. Criminals seem to be a step ahead.

According to a Right to Information (RTI) query response, nearly 16,000 cyber fraud cases were reported across State Bank of India (SBI) branches between January 1, 2024, and October 31, 2025, resulting in losses exceeding Rs 118 crore.

So, what are the regulators doing about it? The Reserve Bank of India (RBI) and government have begun to respond.

The RBI has also launched workshops urging stronger governance and technology adoption among banks and introduced a customer protection framework to compensate victims up to Rs 25,000 in certain cases.

Courts are pressing for comprehensive frameworks to curb UPI fraud and have emphasised stringent action against digital frauds.

That said, policy efforts alone won’t stem the tide. Regulators must go beyond periodic advisories and ensure real-time threat intelligence sharing, compulsory multi-factor authentication standards and legal mandates forcing quicker refunds to defrauded users.

At a broader level, the government should also integrate digital literacy into mainstream education, particularly focusing on scam awareness among youth and the elderly alike.

It is all about the trust in the new-age banking system. Banks shouldn’t let the trust gap to widen and repel the clients.