Unveiling the Mule Accounts Menace in Modern Money Laundering

In a recent statement, a member of the RBI’s board of governors has urged banks to step up efforts against mule accounts. According to Piyush Shukla, money mules in India do much more than move money. A MULE ACCOUNT IS a bank account that receives funds from illegal activities and then transfers those funds to other accounts, thus serving as a bridge for money laundering and other illegal practices to take place. 

It is not uncommon in India to come across people who are opening mule accounts based on their bank accounts that they are offering in place of money as payment.

The account holder’s onboarding process is not automated in this way, which makes it more difficult to detect such accounts. Even though there are ways to put a stop to these accounts, the right controls and monitoring of the user’s behaviour throughout the lifecycle of the account can be employed to give the user the greatest protection. 

Last November it was reported about the arrests of six people in Bengaluru about the alleged operation of 126 mule accounts. There has been raised concern by the Reserve Bank of India (RBI) earlier this week regarding certain banks having a huge number of fraudster accounts used for fraudulent transactions and loan evergreening by their customers. In a move to curb digital fraud, Shaktikanta Das, the governor of the Reserve Bank of India, has directed banks to crack down on the use of mule accounts as well as increase customer awareness and education in

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