Fewer frauds, bigger losses: what the RBI's FY26 numbers tell boards

The Reserve Bank of India's Annual Report for 2025-26 records 10,114 fraud cases reported by banks and financial institutions, down from 23,722 the year before. The value of those frauds moved the other way: ₹48,021 crore, against ₹32,803 crore in FY25.

Two features of the data matter more than the headline. First, loans dominate: advances-related frauds accounted for 8,640 cases and ₹40,774 crore, about 85% of the total value. Second, the total includes 314 older cases worth ₹30,199 crore that were re-examined and re-classified after the Supreme Court's March 2023 judgment requiring that borrowers be heard before an account is declared fraudulent.

What the numbers mean in practice

• Card and digital-payment frauds fell sharply in count, which shows that controls on high-volume, low-value channels are working.
• Large-value fraud is still concentrated in credit, where a single borrower group can divert hundreds of crores through related entities before a red flag is raised.
• Due process now shapes the evidence. A fraud classification has to rest on a record that survives the borrower's response, so forensic work must be built to evidential standard from day one.

Where diligence fails

In our experience the same patterns recur: borrower groups whose real ownership sits behind nominee directors, end-use certificates that nobody tests, collateral valued on documents rather than site visits, and early-warning signals that sit in separate systems. None of these is solved by more paperwork. They are solved by independent verification of who the borrower really is and where the money really went.

Assurance should begin before disbursement and continue after it. Most losses happen in the gap between the two.

Questions for the board and the credit committee

• For our top exposures, has anyone independently mapped the borrower group's related parties?
• Do our end-use checks include site and stock verification, or only certificates?
• Are our fraud examinations built to survive the borrower's right to be heard?
• Do our lenders' assurance and ASM reports reach the committee in time to act?