In January, a 76-year-old woman in Delhi was allegedly cheated of Rs 1.64 crore in a digital fraud case after being drawn into what investigators described as a “digital arrest” scam. In April, an elderly man in Ahmedabad allegedly lost Rs 1.43 crore to callers posing as Telecom Regulatory Authority of India (TRAI) officials.
Across the country, thousands of smaller cases unfold more quietly. A fake UPI collect request. A bogus customer-care number. A phishing link that looks genuine. An OTP shared in panic.
Different methods, different victims, same anxiety. That brings us to the central question of this story: if scams are becoming more sophisticated, are banks doing enough to keep your money safe?
It is no longer just a question asked by worried customers. Earlier this year, the Supreme Court sharply questioned banks over digital fraud cases, asking why suspicious transactions were not being flagged quickly enough and why vulnerable customers were being left exposed after losing savings.
Finance Minister Nirmala Sitharaman has now separately raised AI-linked cyber risks with bank chiefs. If you missed that development, we explained why the finance minister’s warning matters in our earlier report.
When judges, policymakers and customers all begin asking versions of the same question, it usually means the issue has become difficult to ignore.
FRAUD IS CHANGING, NOT DISAPPEARING
While reporting on digital fraud trends in recent weeks, one pattern kept appearing in the numbers. We also recently examined how India’s digital boom is being accompanied by fraud that is becoming harder to detect.
According to Reserve Bank of India (RBI) data, bank frauds in India rose to Rs 36,014 crore in 2024-25, nearly three times the previous year, even as the number of reported cases fell. Separately, data tabled in Parliament showed around 24 lakh digital fraud cases involving losses of more than Rs 4,200 crore in the first ten months of 2025.
These figures capture different parts of the same ecosystem. One reflects higher-value banking fraud. The other captures retail scams affecting ordinary users.
Taken together, they suggest that fraud is not simply rising or falling. It is evolving.
“The RBI’s own data makes the pattern visible. Fewer incidents, far greater damage. This is not less fraud. It is smarter fraud,” Sandesh Gs, CTO at Bureau, told IndiaToday.in while discussing findings from the India Fraud Report 2026.
That helps explain why many customers feel scams are getting harder to spot.
FASTER PAYMENTS, MORE RISKS
India’s banking transformation over the past decade has been dramatic.
UPI now processes billions of transactions each month. Account opening is quicker. Transfers happen instantly. Bills are paid in seconds. Loans can be approved in minutes.
For customers, that has meant convenience at an enormous scale. But speed changes risk too.
If money can move instantly, fraudulent money can move instantly. If onboarding becomes frictionless, fake identities may try to enter faster. If banking shifts to smartphones, fraudsters know exactly where to follow.
That does not mean banks ignored security. Most large lenders have invested steadily in fraud monitoring, stronger authentication, analytics, cybersecurity teams and customer alerts.
The challenge is that fraud tactics have evolved alongside banking systems.
MANY SHADES OF DIGITAL FRAUD
Beenu Arora, Co-founder and CEO of Cyble, an AI-powered cybersecurity and threat intelligence company, said banks remain attractive targets because they are “data-heavy digital platforms”.
He added that cyberattacks are no longer “manual or sporadic”, but increasingly “automated, scalable and more difficult to detect”.
That sounds technical, but many customers recognise the real-world version.
The message looks cleaner. The fake caller sounds calmer. The request feels personalised. The timing feels believable.
Arora warned that deepfakes can replicate voices or video images of senior executives to authorise fraudulent transactions or manipulate employees. Generative AI can create hyper-personalised phishing messages. Synthetic identities can combine real and fake information to bypass checks and obtain loans.
While some of these threats sound corporate or high-level, the impact often reaches ordinary users through scams, fake payment requests and account takeovers.
A 2025 survey by LocalCircles found that one in five UPI users in India had experienced fraud at least once. That suggests scams are no longer fringe risks affecting only careless users. They are now part of mainstream digital life.
WHERE BANKS MAY BE PLAYING CATCH UP
One recurring concern from experts is that many systems still respond after the money has moved. “For most institutions, the honest answer is no,” Sandesh said, when asked whether fraud detection had fully kept pace with digital growth.
According to Bureau’s estimates, around Rs 1,120 crore in losses could have been prevented using systems that already exist.
That concern also echoed in the Supreme Court’s remarks, when it questioned why suspicious transactions cannot be suspended quickly and alerts sent immediately when unusual activity is detected.
Those observations go to the heart of the modern banking dilemma.
Customers expect seamless payments. They also expect protection when something clearly looks wrong.
Sometimes those two expectations collide.
THE AI CHALLENGE
Dr. Kanishk Agarwal, Chief Technology Officer at Judge Group, described AI as “a new force multiplier for financial crime”. He said the difference lies not only in sophistication, but in the velocity and scale of attacks.
In practice, that can mean more convincing scam calls, cleaner phishing messages, faster identity fraud and repeated automated attempts to test systems for weakness.
He also said banks have long relied on one-time PINs, voice authentication and behavioural analytics. Those tools still matter, but may lose effectiveness if not upgraded for an AI-driven fraud environment.
If you want the deeper AI angle, we unpacked the Mythos debate and what it could mean for Indian banks in a separate analysis.
ROAD AHEAD FOR BANKS
Banks are likely to spend more on real-time fraud detection, stronger identity checks, quicker complaint handling and better customer awareness. Some experts also support adding extra friction to certain risky transactions if it creates a short window to detect suspicious activity.
That debate has now reached the RBI as well. Earlier this month, the central bank released a discussion paper proposing a one-hour cooling-off period for certain digital transfers above Rs 10,000, giving customers extra time to pause or review suspicious payments before funds move irrevocably.
While that may feel inconvenient in a world where we have become so used to instant payments, convenience means little when there is a higher risk of fraud.
To sum up, India’s banks are stronger than they were a decade ago. Payments are faster, fraud controls are sharper, and digital access has expanded dramatically.
The challenge, however, is that fraud has evolved just as fast. Scams are more convincing, attacks are more targeted, and stolen money can move before victims realise what has happened.
That is why the real test for lenders may no longer be how quickly they move money, but how quickly they can recognise when it should not move at all.
(This is Part 1 of our series on Banking Risks in Digital India. In Part 2, we examine what leading banks are doing to protect customers and respond to rising fraud and AI-linked threats.)
