Bank: Banks seek floor to flag frauds on Daksh reporting mechanism

Banks have reached out to the Reserve Financial institution about fixing a threshold for reporting of fraud transactions on its superior supervisory administration system, Daksh.

A senior financial institution govt instructed ET that lenders had approached the RBI highlighting the problem posed by giant quantity of knowledge thrown up within the absence of any threshold. As per lenders, reporting of all knowledge could not result in any significant consequence.

“If there’s a sample in fraudulent transactions, the RBI can level that out to the lenders to take appropriate motion, however most instances low-value transactions are usually not indicative of any sample however particular person negligence,” mentioned one other banker.

Bankers favour an affordable threshold for reporting of frauds.

“We now have recommended that for transactions beneath the edge restrict, we’ll report the modus operandi,” he mentioned. He mentioned the edge restrict could be finalised along side the central financial institution.

Lenders have additionally recommended creation of a ‘damaging registry” of accounts which were reported to have repeatedly obtained funds from transactions marked as fraudulent.

Since January 2023, all RBI-authorised cost system operators (PSOs), suppliers and cost system individuals working in India are required to report all cost frauds, together with tried incidents, regardless of worth, both reported by their clients or detected by the entities themselves.

Throughout 2022-23, public sector banks reported 3,405 frauds involving ₹21,125 crore, whereas personal banks reported 8,932 circumstances involving ₹8,727 crore. That is for circumstances of fraud involving ₹1 lakh and above.

In fraud circumstances of ₹1 lakh and above, small-value card or web frauds contributed essentially the most to circumstances reported by personal banks, whereas the frauds in public sector banks had been primarily in mortgage portfolio, based on an RBI report.