The fight against mule accounts demands a dynamic approach driven by technology. | Photo credit: Sataesh Vellinezhi
To verify cyber fraud through mule accounts, banks seek authority to freeze the accounts involved in the channeling of ilical transactions without wasting precious time in the search for the permission of the authorities.
However, banks freeze/block accounts based on internal triggers, according to the money laundering prevention law (PMLA), do not have the authority to freeze or block customer accounts the adequate authorization of an agenco of a court or force of force).
“In light of this, we can propose this as a suggestion for greater consideration by the RBI,” said a working group consisting of Indian banks, “he said in a report.
The scammers use mule accounts to move illegal funds through the banking system. Althegh Banks freeze thousands of these accounts every year, scammers quickly create new accounts using gaps in the system.
In addition, he said, banks can seek to verify and restrict the accounts most vulnerable to misuse, since the “mule” accounts to channel the illicit money.
Banks have proposed to use the database of the electoral commission to verify the people who open accounts use voter identification cards and form 60, in the absence of a permanent account number (PAN), and limit the number of transactions in such accounts.
The fight against mule accounts demands a dynamic approach driven by technology. By integrating artificial intelligence and automatic learning into transaction systems, banks can address existing gaps, anticipate criminal strategies and protect the integrity of the financial ecosystem, he suggested.
A concerted effort of investment of technology, staff training and collaboration between interested parties will guarantee a safer financial landscape.
The report represented a plan to stop Mule Mule’s activities, he said, adding that the implementation of these measures will require dedication and cooperation of financial institutes, regulators, agencies for the application of the law and technology suppliers.
Together, he said, banks can safeguard the financial system against evolving threats and the threat of Mule Mule accounts.
Posted on April 13, 2025
