Surge in “Mule” Bank Accounts: An Alarming Trend in Cyber Crime
In a recent development, the Centre has taken significant action to combat the rising menace of “mule” bank accounts—accounts used for laundering proceeds from cybercrimes. Over the past year, approximately 4.5 lakh mule accounts have been frozen across multiple banking platforms, with a significant number detected in some of India’s largest financial institutions.
What are Mule Accounts?
Mule bank accounts are typically created using the KYC (Know Your Customer) documents of unsuspecting individuals. Fraudsters use these accounts to route illegal transactions, usually for money laundering. These accounts are often used to withdraw or transfer illicit funds through various methods, including cheques, ATMs, and digital transactions.
The Numbers: Where Are the Mule Accounts?
The Indian Cyber Crime Coordination Centre (I4C) has shared alarming data highlighting the prevalence of these accounts across different banks. Here are the figures:
- State Bank of India (SBI): 40,000 mule accounts
- Punjab National Bank (PNB): 10,000 mule accounts (including Oriental Bank of Commerce and United Bank of India)
- Canara Bank: 7,000 mule accounts (including Syndicate Bank)
- Kotak Mahindra Bank: 6,000 mule accounts
- Airtel Payments Bank: 5,000 mule accounts
The staggering numbers reflect the widespread nature of this issue across both traditional banks and fintech institutions.
Methods of Fraudulent Withdrawals
Fraudsters employ several methods to withdraw funds from mule accounts:
- Cheques
- ATM withdrawals
- Digital transactions
In 2023 alone, nearly 1 lakh cybercrime complaints have been registered, with an estimated ₹17,000 crore lost to cyber frauds.
Tackling the Problem: Government Action
The Centre has responded by freezing a significant number of these accounts and initiating investigations into the roles of bank managers and officials who may be complicit in opening such accounts. An inter-ministerial panel has also been set up to address vulnerabilities in the banking system.
Measures to Prevent Mule Accounts
Several banks, including Airtel Payments Bank, are taking proactive steps to mitigate the risk of mule accounts. Airtel Payments Bank, for example, uses real-time API integration with the I4C suspect registry and employs AI/ML models to detect account takeovers and prevent fraud.
The authorities are urging banks to enhance their security measures and streamline the detection of such illicit activities.
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Conclusion: A Call for Vigilance
While the authorities are stepping up their efforts to combat cybercrime, it is clear that both banks and customers must remain vigilant. Strengthening the banking system’s defenses, improving KYC protocols, and enhancing fraud detection systems will be essential in curbing the rise of mule accounts and safeguarding against financial cybercrime.
Visual Breakdown of Mule Accounts
| Bank | Mule Accounts Detected |
|---|---|
| State Bank of India | 40,000 |
| Punjab National Bank | 10,000 |
| Canara Bank | 7,000 |
| Kotak Mahindra Bank | 6,000 |
| Airtel Payments Bank | 5,000 |
This highlights the widespread nature of the problem across major banks and underscores the need for comprehensive action to combat cybercrime in India.
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