RBI urges banks to buckle up against mule accounts

• Follow

New Delhi: The RBI has instructed banks to intensify their efforts against ‘mule accounts’. RBI Governor Shaktikanta Das recently convened a meeting with top officials of government and private banks, urging them to undertake awareness campaigns and other measures to curb the rising digital frauds.

What exactly are ‘mule accounts’?

Cybercriminals essentially use these bank accounts for money laundering.

In simple terms, some individuals possess multiple bank accounts that they do not actively use. These accounts can become ‘mule accounts’, facilitating illegal activities such as money laundering or tax evasion. They often transfer the funds from these accounts elsewhere using methods such as other bank accounts, credit cards, debit cards, or UPI.

To understand this modus operandi of fraud, cybercriminals initiate contact with individuals through phishing emails, chat rooms, or social media. They lure victims with promises of rewards or other incentives, gaining access to their bank accounts. Once access is obtained, the process of money laundering begins.

The scale of ‘mule accounts’ has been rapidly increasing, as indicated by BioCatch’s ‘2024 Digital Banking Fraud Trends in India’ report, which cites instances of over ₹1.8 crore laundered through such accounts recently. Consequently, the RBI is concerned and has urged banks to take stringent measures.

It’s crucial to safeguard your account from becoming a ‘mule account’, as it could lead to significant losses. If caught, you may face legal consequences, even if you were unaware of the fraudulent activities. They could close your account, resulting in the loss of access to future financial services such as loans.

To protect yourself, avoid visiting suspicious websites, especially those related to gambling, gaming, or adult content, as they could be hubs for ‘mule account’ fraud. Additionally, exercise caution when considering job offers that involve money transfers or payments from others. Stay vigilant and stay safe.