Significant growth and inequalities from the emancipation of the economy have been found in the Indian banking sector. Although the banking sector has a more robust regulatory system and is well regulated, this sector has faced a range of challenges when it comes to fraudulent activities and financial crime. This paper highlights problems, i.e., banking industry fraud, unethical activities through the use of secondary data such as literature review, and case studies covering all people involved in such malpractices. This article uses psychological and conventional criminological theories to discuss cyber fraud victimization and cyber safety risks during COVID-19. In addition, the report also gives several recommendations for reducing the extent of potential fraud in the banking sector. Furthermore, this study also presents the statistics and types of fraud in the Indian banking sector.