The Finance Ministry has revealed a concerning rise in UPI fraud incidents, with a staggering 85% year-over-year increase in FY24, resulting in 13.42 lakh cases worth ₹1087 crore. To combat this issue, the Reserve Bank of India (RBI) has implemented the Central Payment Fraud Information Registry (CPFIR), a web-based tool for reporting payment-related frauds, since March 2020. All regulated entities are required to report payment-related frauds to the CPFIR.

To prevent payment-related frauds, including UPI transaction frauds, the government, RBI, and National Payments Corporation of India (NPCI) have taken various initiatives. These measures include device binding between customer mobile numbers and devices, two-factor authentication through PIN, daily transaction limits, and limits and curbs on use cases. Additionally, NPCI provides a fraud monitoring solution to all banks, enabling them to alert and decline transactions for fraud mitigation using AI/ML-based models.

The RBI and banks have also launched awareness campaigns through short SMS, radio campaigns, and publicity on preventing cybercrime. These efforts aim to educate customers on the risks associated with online transactions and the importance of being vigilant when using digital payment systems. The rise in UPI fraud incidents highlights the need for continued awareness and education on safe online transaction practices.