Scammers Stole $2.5 Billion From Indians. Can the RBI Stop Them?

Key Takeaways 
 

• Nearly 2.5 million Indians lost $2.5 billion to digital fraud in 2025, which marks a massive 4,300% increase since 2021. India’s central bank, the Reserve Bank of India (RBI), has released a discussion paper suggesting steps to control this.
   
• Digital payment fraud in India has been rising steadily, especially after the rapid growth of UPI and online transactions post-2020. Scammers are now using more advanced social engineering tricks to cheat people.

A ₹21,000 Crore Problem: How Digital Fraud is Draining Indian Wallets?

In February 2025, a Pune-based business analyst got a message asking him to pay ₹1,000 as a speeding fine. He clicked the link, entered an OTP, and within minutes, ₹2,70,000 was deducted from his credit card.

This is not uncommon. According to data from the Reserve Bank of India (RBI), nearly 2.5 million Indians became victims of digital fraud in 2025. Total losses crossed $2.5 billion. These scams include phishing links, fake government websites, and so-called “digital arrest” frauds.

From One Click to Zero Balance: What Everyday Indians Are Facing?

Most victims are ordinary people, not just the elderly. Fraudsters now use fake traffic fines, job offers, and KYC update messages. They create urgency, making people act quickly without thinking.

The Reserve Bank of India (RBI) discussion paper, released in April 2025, suggests four key safety measures as shown above. But putting all of them in place will need changes across India’s entire payment system, something the RBI itself says will require significant “cost and effort.”

Experts Warn: Good Intent, but will it actually work?

Experts support the Reserve Bank of India’s move but have serious concerns about how it will work in real life.

Rajesh Bansal, former CEO of RBI’s Innovation Hub, told the BBC, “These scams were the dominant variety three or four years ago, but frauds have now moved to another level and are far more sophisticated.”

He also said that the RBI already created a mule detection platform called MuleHunter.AI. “It needs to be used in near real-time in the banking system. Unfortunately, that has not happened,” he added.

Wriju Ray from IDfy raised concerns about implementation. “It is not going to be easy to introduce a delay because there are so many parties involved in the payment network,” he said.

Both experts agree that rules alone are not enough. India is going digital much faster than people are learning how to stay safe. Ray suggested more investment in digital awareness, not just celebrity campaigns. Bansal highlighted the need for coordination: “The challenge right now is, whose baby is this?”

Conclusion 

India’s digital fraud problem is real, large, and growing quickly. The Reserve Bank of India (RBI) discussion paper is a good first step. But technical solutions need faster rollout, better coordination between agencies, and strong public awareness. Until all three come together, millions of Indians remain at risk every time they tap “Pay.”

Frequently Asked Questions 

1. How can people in India protect themselves from rising digital fraud in 2025?
Avoid clicking unknown links, never share OTPs, verify payment requests, and use official apps or websites only to stay safe. Awareness and quick verification are the best protection against fraud.

2. Why are cyber fraud losses in cities like Mumbai still so high despite regulations?
Even with steps by the Reserve Bank of India (RBI), fraud remains high due to low awareness, delayed reporting, and sophisticated scams. Recovery is low because money moves quickly across multiple accounts.