Why in the news?

  • Nearly 1,47,445 mule accounts were being operated across India by cyber fraudsters from Southeast Asia until June 30 this year, with Delhi, Mumbai and Bengaluru featuring among the top ten hotspots.

Mule Accounts

  • What is it?:
    • Bank accounts are exploited by criminals for illegal activities like money laundering.
    • Often acquired from individuals in lower-income or less technically literate groups.
    • Account holders, called ‘money mules’, may unknowingly become targets of police investigations.
  • Government and RBI Initiatives:
    • Policy Measures: Collaboration between RBI, Department of Financial Services (DFS), Indian Cybercrime Coordination Centre (I4C), and banks. Emphasis on adopting AI/ML technologies and MuleHunter for fraud prevention.
    • Hackathons: RBI’s “Zero Financial Frauds” hackathon to encourage innovative fraud prevention solutions.
    • Training and Best Practices: Staff training and inter-bank collaboration are emphasized. Restrictions proposed on accounts with sudden high-value transactions after dormancy.
    • MuleHunter AI:
      • RBI’s AI-powered tool designed to detect and prevent “mule” bank accounts used for financial fraud. Developed by the Reserve Bank Innovation Hub (RBIH) in Bengaluru.
      • Utilizes advanced AI algorithms to identify suspicious patterns and mule accounts efficiently.
      • Encourages collaboration between banks and Reserve Bank Innovation Hub to refine and adopt the tool.