The National Payments Corporation of India (NPCI) has begun piloting an AI system designed to track stolen money as it moves across bank accounts in real time. The model aims to flag suspicious transactions instantly, helping banks intercept fraud before funds are dispersed across multiple accounts, improving recovery chances significantly.

India's banking sector is set to get a new layer of defence against digital fraud, with the National Payments Corporation of India (NPCI) initiating a pilot for an AI model designed to detect and track stolen money as it moves across bank accounts in real-time.

According to an ET report, the AI system aims to intercept fraudulent transactions before the siphoned funds vanish, a critical gap in the current fraud-response framework where stolen money is often moved across multiple accounts within minutes, making recovery difficult once the trail goes cold. The technology is intended to track the flow of funds in real-time, flagging suspicious movement as it happens rather than after the fact.

Why it matters

Digital payment fraud has been a persistent concern for India's banking and payments ecosystem as transaction volumes have scaled rapidly. The report noted that the new system is significantly reducing losses for victims and bolstering the security of digital payments across the nation, positioning real-time fund-tracking as a meaningful upgrade over after-the-fact fraud reporting and recovery mechanisms that banks have relied on so far.