Types of Banking Frauds and Precautions for Safe Banking | AU Small Finance Bank
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All Types of Banking Related Frauds and Precautions One Needs to Take

    Over the past years, many frauds have been reported in the banking sector, such as identity theft and phishing. Read on to know more about such frauds and what precautions you can take to avoid being soft victims. 

    Have you ever received telephone calls, SMS or emails promising 'quick returns' through a scheme? If yes, you've mostly been the target of attempted fraud. Despite the Reserve Bank of India (RBI) issuing advisory alerts and the entire banking system incorporating state-of-the-art mechanisms to ensure security and structural integrity, fraudulent activities are rising.


    What is Bank Fraud?

    Bank fraud involves the use of deception to acquire sensitive banking information for malicious reasons. Unscrupulous minds concoct stories and employ sophisticated tools to dupe gullible customers out of their hard-earned money. Let's take a quick look at the banking frauds prevalent and some safety tips to thwart the attempts of swindlers.

    Types of Frauds in Banks:


    Phishing is a common online banking fraud. The fraudsters procure bank details and personal information via fictitious emails from the unsuspecting victims and swindle money from their accounts.


    This is another cybercrime wherein the scammer gets confidential details like user ID, OTP (One time password), Card PIN, CVV, and more through fictitious calls. Typically, the scammers pose as legitimate bank personnel, and they hoodwink customers to divulge personal information for fraudulent banking transactions.

    Identity Theft:

    This involves impersonating a legitimate bank account holder by gaining access to their confidential details to commit crimes such as taking loans, transferring funds, or obtaining credit cards. Identity theft can have severe repercussions for the victim's personal and financial reputation.


    Smishing is similar to a phishing attack. Scammers use text messages instead of emails to draw confidential information by enticing customers with job offers, lottery money to click on fraudulent links with the lure of job offers, lottery money, and more.

    Card Skimming

    Skimming is used to steal personal data from debit/credit/ATM cards during a transaction. It can occur at gas stations, ATMs, retail outlets, etc. A small device fitted in the card slot of the payment terminal captures the information from the magnetic strip. Fraudsters use the stolen data to make fake cards or shop online.

    Tips for safe banking

    Given that scammers are just waiting for you to let your guard down, there is a need to take some basic precautions while carrying out financial transactions. Here are a few online banking safety tips that should be observed.

    • Keep your contact details updated with the bank and subscribe to get notifications for transactions.
    • Do not disclose confidential details like passwords, login credentials, or PINs to anyone. No bank calls or emails you to share sensitive information or account details.
    • Install anti-virus and anti-spyware software for regular scans to safeguard your personal information.
    • Use strong/unique passwords and change them frequently.
    • Prevent identity theft by adding another layer of protection called multi-factor authentication.
    • Exercise caution when using your card over the internet. Disclose your Card Verification Value (CVV) only on secure payment websites.
    • Do not click on links received from unknown sources or reply to unsolicited emails that promise benefits.
    • Monitor your accounts and credit card statements every month and report any suspicious activity to the bank immediately.
    • Always log out and turn off the browser after completion. 

    Safe Banking Practices for Offline Transactions

    • Check your transaction history/account activity regularly and report any discrepancies to the bank instantly.
    • Don't share details like PIN, passwords, or OTP with anyone.
    • Avoid taking help from strangers at the ATM
    • Never sign blank cheques.

    Frauds in the banking sector are not only escalating but also evolving in complexity. Crooks are always conspiring to con the naïve of their money. While banks and financial institutions work consistently to prevent fraudulent transactions, customers also need to take precautions. 

    Learn how to keep your hard-earned money safe from different kind of fraudsters here.

    The best way to avoid being targeted by miscreants is to exercise caution, be more vigilant, and bank smartly. Know more

    Safe Banking!