Recent Trends in Banking Sector with Special Reference to E-Banking Frauds in India

An Analysis

Abstract

The globalization of Indian economy and technological advancements have brought sea-changes in the banking sector. Electronic banking (also known as “e-banking” or “internet banking”) services were tailored in consonance with the speedy expansion of information and communication technologies. As technologies advance, the fraudsters have also become more sophisticated and the menace of frauds thwarted the Indian banks. Banking business has been witnessing a shift from traditional modes to digital channels and nowadays it is conducted more online than ever. E-banking is targeted by cyber criminals, hence e-banking frauds are a type of cyber-crimes. According to the Reserve Bank of India’s annual report, “bank frauds of ₹100,000 and above have more than doubled in value to ₹1.85 lakh crores in the financial year 2020 as compared to ₹71,500 crores in the financial year 2019”. Also, the number of such cases has increased by 28% in the same period. The report further states that, around one-third of the total fraud incidents reported, were cyber frauds. Awareness and sensitization is undoubtedly the key to citizen friendly safe and secure internet banking, but it is just the tip of an iceberg as prevention and control of such frauds needs a wider review of traditional anti-fraud solutions. Against this background, this paper attempts to analyze e-banking frauds in the Indian banking sector and the legal provisions prohibiting and preventing such frauds along with the possible suggestions for ensuring safe and cyber secure nation.