In a bid to curb cyber fraud involving mule accounts, banks are requesting the authority to freeze accounts used for unlawful transactions with out the necessity for prior approval from courts or legislation enforcement companies. A working group fashioned by the Indian Banks’ Affiliation has advisable that this problem be taken up with the Reserve Financial institution of India (RBI) for additional consideration.
Underneath the Prevention of Cash Laundering Act (PMLA), they lack the authorized authority to freeze or block buyer accounts with out correct authorisation. Presently, banks can block accounts based mostly on inner alerts.
Mule accounts are sometimes utilized by fraudsters to maneuver unlawful funds by the banking system. Though banks freeze many such accounts every year, fraudsters exploit system loopholes to open new ones rapidly.
The report additionally urged that banks establish and monitor accounts extra liable to misuse as mule accounts. It proposed utilizing the Election Fee’s database to confirm people who open accounts utilizing voter ID and Type 60 (when PAN is unavailable) and urged limiting the variety of transactions on such accounts.
To successfully deal with mule accounts, the report advisable a technology-driven method. The usage of Synthetic Intelligence (AI) and Machine Studying (ML) in monitoring transactions may also help detect suspicious actions, anticipate fraudulent patterns, and strengthen the monetary system.
A coordinated effort involving technological funding, workers coaching, and collaboration between banks, regulators, legislation enforcement, and know-how suppliers is important.
The report presents a strategic plan to deal with mule account-related fraud. Profitable implementation will rely upon the joint dedication of all stakeholders to make sure the safety and integrity of the monetary ecosystem.
