A Study of Online Banking Scams / Frauds In India

Abstract

India has adopted the policy of digitalization in 2016. Since that the number of online bank frauds have grown with much higher rate. Especially the frauds like phishing, vishing, ATM frauds etc. The research asserts that such frauds in public sector banks are much higher than that of the private sector banks. The research has shown that even if the number of fraud is decreasing in both private and public sector banks; the amount of scams is much higher in the public sector bank than that of the private sector banks. Fraudulent activity has generally decreased across public, private, and foreign banks, along with other financial institutions. However, in 2023-24, small finance banks experienced a notable rise in fraud, increasing from ₹31 crore to ₹64 crore, and payments banks saw an increase from ₹7 crore to ₹35 crore. Public sector banks reported a significant reduction in fraud, from ₹77,879 crore in 2020-21 to ₹10,507 crore in 2023-24, a decrease of 86.5%. Similarly, private sector banks saw a decline from ₹45,515 crore in 2020-21 to ₹3,170 crore in 2023-24, a 93% drop. To prove this t-test for two sample means have been applied and the results were quiet satisfactory as the p value of 0.0219 (one-tailed) and 0.0437 (two-tailed), both of which are below the 0.05 threshold. Which was enough to reject the null hypothesis. Public Sector Banks exhibit higher and more variable performance compared to Private Sector Banks, with a significant statistical difference.