Crackdown on mule accounts
FINANCIAL CYBER CRIMES | Ministry asks RBI and NPCI to advise banks, financial institutions and tech security companies to crack the whip
The Ministry of Home Affairsaffiliated Indian Cyber Crime Coordination Centre (I4C) has asked the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) to advise banks, financial institutions and tech security companies to crack down on mule accounts to prevent frauds, financial cyber crimes and online payment scams.
The banks and financial regulators have been asked to identify mule accounts and devise technologies to detect and shut them down. “Top financial tech service providers have been tasked to deploy advanced solutions at major banks’ backends to predict the fraudulent behaviour of customers and stop transactions through those accounts,” an MHA official said.
The MHA estimates that there are 500,000 mule accounts in the Indian banking system, with a mere 200-300 identified using advanced analytical tools. “The mule accounts operated by fraudsters are used to transfer funds defrauded from victims’ accounts to further multiple accounts and get encashed or converted into cryptocurrency,” another cyber crime officer said.
The I4C is facilitating blocking of SIM cards, mobile devices and mule accounts used by cyber fraudsters.
A committee set up by the MHA to tackle the spurt in transnational cyber crime originating from Southeast Asian regions of Cambodia, Thailand and Malaysia has representatives from the RBI, the Department of Financial Services, the Financial Intelligence Unit, the Department of Telecommunications, banks and fintech companies as members.
“The banks, telecom service providers, IT intermediaries and social media companies need to strengthen their backends to prevent cyber attacks and frauds, and sanitise every accounts for suspicious activities,” the second official said.
I4C, in collaboration with Microsoft, has so far blocked more than 1,000 Skype accounts linked to intimidation, blackmail, extortion and ‘digital arrests’ of citizens by cyber criminals posing police, Central Bureau of Investigation, Narcotics Department, RBI or Enforcement Directorate.
The mule accounts operated by fraudsters are used to transfer funds defrauded from victims’ accounts to further multiple accounts and get encashed or converted into cryptocurrency
— Cyber crime official