Kotak Mahindra Bank Asks RBI To Standardise Fraud Reporting Across Banks
Kotak Mahindra Bank says other lenders are not reporting frauds diligently.
Private lender Kotak Mahindra Bank Ltd. on Tuesday said it has requested the Reserve Bank of India to standardise fraud reporting across all banks.
"We have observed that there is significant variance in what is chosen to be reported to the regulator by other banks," the lender said in a statement. "We have appealed to the regulator vide our letters dated March 17, 2022, and Aug. 30, 2022, to enforce standardisation in reporting requirements."
The statement comes after the media reported that Kotak Mahindra Bank saw 5,278 instances of fraud during the April-June quarter, the highest among all lenders in India. The data, collated by the RBI, was released by the government as part of parliamentary answers.
According to the list, ICICI Bank Ltd., with 436 cases, reported the second largest number of frauds in the first quarter of the current fiscal. HDFC Bank Ltd. reported 303 cases, while IndusInd Bank Ltd. reported 200 cases, according to the data released by the government. India's largest lender, State Bank of India, reported only nine fraud cases in this period.
Kotak Mahindra Bank said that of the 5,278 instances of fraud, 97% were digital and card-related frauds that occurred due to customers unwittingly compromising their credentials by clicking on unknown links, giving access to their devices or sharing their credentials with unscrupulous individuals willingly.
"It is our submission that other banks do not appear to be exhaustively or uniformly reporting these types of frauds," the private lender said. "Such frauds are not a reflection of any vulnerabilities in the bank’s secure infrastructure and systems."
Kotak Mahindra Bank, however, has seen a steady downward trend in the number of such digital fraud transactions reported by customers, which dropped 27% year-on-year.