Customer trust is essential for the proper operation of the banking industry, which is the foundation of any economy. However, the growing trend of banking frauds is a major worry, threatening not only the integrity of the financial system but also the emotional wellness of customers. The purpose of this research is to gain an understanding of the emotional effect of bank fraud on customers and its consequences for the banking industry. Data was obtained from customers of public and private sector banks in four cities in Gujarat, India, using a questionnaire-based survey. The findings reveal that when fraud-related news is published, customers suffer an emotional trauma. They feel deceived and mislead. The study emphasises the need of banks successfully addressing consumer emotions in order to retain positive connections during these challenging times. Understanding emotional responses may assist banks in developing suitable tactics for reputation recovery and crisis management, maintaining long-term customer loyalty and trust. As the number of banking fraud instances increases, this research becomes more important in assisting banks in navigating the emotional impact on consumers and mitigating the negative impacts on the nation's economic system's stability and confidence.