| Introduction: Contextual Introduction Body: Highlight the role of mule accounts and measures to strengthen the framework Conclusion: Way forward |
The increasing misuse of “mule accounts” for laundering proceeds from cybercrimes has become a critical concern in India. Mule accounts are typically created using fraudulent or misappropriated KYC documents and allow cyber criminals to obfuscate the money trail.
Contents
Role of Mule Accounts in Cybercrime Operations in India
- Money Laundering: Cybercriminals often use mule accounts to transfer stolen funds, making it difficult to trace the source. Funds are routed through multiple accounts to obfuscate the money trail.
- Online Fraud: Mule accounts facilitate various forms of online fraud, including phishing, fake investment schemes, and online shopping scams. These accounts receive stolen money from victims, which is then quickly moved or withdrawn to avoid detection.
- Recruitment through Social-Media: Cybercriminals exploit the financially vulnerable, students, or unemployed individuals, often recruiting them via social media and messaging platforms, making them unwitting participants in cybercrime by promising easy money.
Government Measures to Counter the Challenge of Mule Accounts
- Freezing Mule Accounts: In coordination with the Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs, the Centre has frozen around 4.5 lakh mule accounts. I4C monitors cybercrime and coordinates with financial institutions and law enforcement.
- National Cyber Crime Reporting Portal: Citizens can report cyber frauds through this portal, which facilitates rapid action by relevant authorities. Over 1 lakh complaints have been filed since January 2023.
- AI/ML-Based Screening by Banks: Airtel Payments Bank, for instance, has implemented real-time API integration with I4C’s suspect registry and utilizes AI/ML models to detect mule accounts and prevent takeovers. Innovations such as “Face Match” technology verify customers’ identities through KYC records, reducing fraud risks.
Suggested Measures to Strengthen the Cybercrime Prevention Framework
- Enhanced KYC Norms and Verification: Banks should implement stricter KYC verification methods and advanced digital identity checks (e.g., biometrics and facial recognition) to detect and deter fraudulent account creation.
- Cross-Platform Collaboration: Enhanced cooperation between banks, telecom providers, and financial service providers is essential for sharing data and insights on mule activity.
- Public Awareness Campaigns: To prevent the recruitment of vulnerable individuals as mules, public awareness campaigns should emphasize the risks and consequences of sharing or renting out bank accounts.
Conclusion
With these measures, India can better protect its citizens from cyber fraud and reinforce the integrity of its financial system.
