T Rabi Sankar: Frauds up since July, battle on

MUMBAI: RBI deputy governor T Rabi Sankar said the fight against digital fraud is far from over, noting that the decline seen earlier this year reversed in July, with cases rising again.

He said fraud levels had been falling since the start of the year before showing an uptick mid-year, suggesting that such trends may be cyclical. "This is not a fight that is won at a point in time. It's a continuous battle against bad actors who misuse any system," he said at the SBI Banking and Economic Conclave on Friday.

Sankar said RBI's strategy is to leverage digital public infrastructure to strengthen security in payments. He cited initiatives such as the Mule Hunter AI and the Digital Payment Intelligence platform, which are designed to detect fraudulent accounts and prevent misuse. "We are hoping that with the digital infrastructure we are creating, and with success rates of over 90% being reported, we will be able to contain frauds," he added.

Sankar said that RBI has been working with a few banks, including State Bank of India, to test the use of censtral bank digital currency (CBDC) in cross-border transfers, in a move aimed at cutting settlement layers and related costs. He said the main expense in overseas remittances remains the currency exchange spread, which CBDC does not directly address. There are ongoing trials that may show whether exchange costs can be improved later, but Sankar described that as a separate challenge.

Sankar said RBI is focusing on identifying domestic CBDC applications built on programmability, progressing cross-border pilots when suitable conditions exist, expanding tokenisation of money and assets, limiting risks from stablecoins, and strengthening fraud intelligence. He said RBI is not in a hurry and intends to calibrate timing with system conditions. He said the rollout must be gradual to avoid risks to financial stability.