Online financial fraud value ballooned between 2002-2023: Govt tells Parl panel
People aware of the matter said the panel’s members expressed unhappiness over the spiralling cases and the lack of coordination on tackling cyber financial fraud
The value of online financial frauds ballooned from ₹2296 crore in 2022 to ₹5574 crore in 2023, the Union home ministry has informed the Parliamentary Standing Committee on Communications and Information (IT) Technology. The ministry explained to the panel the modus operandi, the hotspots for such crimes, and how some scammers operate from overseas areas such as Dubai, Hong Kong, and Cambodia. The hotspots in India have extended beyond Bihar, Uttar Pradesh, and Jharkhand to West Bengal as well.

People aware of the matter said the panel’s members expressed unhappiness over the spiralling cases and the lack of coordination between ministries and departments on tackling cyber financial frauds. They expressed dissatisfaction with the pace at which such crimes are solved. The members asked officials about the conviction rate but that data was not readily available.
IT secretary S Krishnan, National Informatics Centre deputy director general Deepak Goel and officials from Reserve Bank of India, National Payments Corporation of India (NPCI), Punjab National Bank, and State Bank of India were among those who appeared before the committee to discuss “Digital Payment and Online Security Measures for Data Protection”.
The IT ministry gave a presentation on the nature of such cyber frauds while the home ministry on the steps taken to combat them.
A home ministry official told the panel that micro-ATMs were being used to siphon money in states such as Haryana. The members asked why the ministry was not closely coordinating with the banks to resolve this issue.
The official pointed out many cooperative banks do not have systems in place to deal with online financial frauds. The ministry officials were also asked about statistics related to online financial crimes across private banks, but that data was also unavailable.
At least one member brought up the issue of fraud using the Aadhaar-enabled Payment Systems (AePS) network. The NPCI notified all banks and payment companies offering AePS on October 26 to introduce mandatory security norms for such transactions, the Economic Times reported.
Home ministry officials told the panel that they need to think of other ways of executing multi-factor authentication apart from one-time passwords sent to mobile phones. The members were also told that cryptocurrency and virtual accounts were being used for fraud. They pointed out that the government’s stance on the legality of cryptocurrency was unclear.
The Shiv Sena lawmaker Prataprao Jadhav-led committee gave the officials 10 days to reply to the questions raised at the panel’s meeting.
