While policing in Karnataka was ranked the best in the country recently in a survey, it has been in the news for wrong reasons for some time now. Now it gets the dubious distinction of having the largest number of mule accounts amongst all the south Indian states. Though it is not of police’s making but given its deep connection with cybercrimes, more so the famous digital arrests, we are forced to take notice. At least one becomes aware that gaping holes exist in the banking system and KYC and systems and processes that follow to maintain its sanctity are meant only for the law-abiding account holders.
It is unbelievable but true. Cybercriminals are using 65,000 mule bank accounts in Karnataka to act as conduit for transferring their ill-gotten money in 2024. The most fascinating part of this release of data on mule accounts at the national level by Indian Cybercrime Coordination Centre, is that action taken to bust it and accounts neutralised is not made known. Is collecting data the beginning and the end? For the information of the uninitiated this is just the first layer. No one knows the actual numbers. This is for the first level transfers and then it may go through a whole web of mule accounts to reach its destination bank account.
We are not even aware of the fact as to what actions banks are taking to counter it or banking means getting more and more accounts opened. Has any action taken on the banks for not being able to do anything about it? Is there any system of physical verification before opening accounts? Any drastic changes / surgical action of any kind, since the existence of mass mule accounts became known. What a shame, same inaction all across the country. Inaction / negligence / facilitation, by banks or give any other name. The average of other four south Indian states is 25,000 only. If there are lakhs of mulling accounts in the country, then it is apt to say that the Indian banking system has been successfully mulled.
There are two types of mule accounts; one created using faulty or fake KYC documents, and genuine bank accounts of gullible citizens bought by fraudsters. Getting mule accounts opened / created is the job of the foot workers of cybercrime. Mule accounts are the financial vehicle of cybercrime and hence its criticality. Fraudsters rent accounts from small businesses and also use borrowed accounts from traders with cash-intensive accounts. Renting / selling of bank accounts offers are available on Darknet and Telegram channels. Do banks have the capability and the will to fulfill their responsibility of monitoring suspicious accounts and transactions is the billion-dollar question.
BANKS SHOULD NOT BE ALLOWED TO GROW AT THE EXPENSE OF CYBER CRIMES AND MORE IMPORTANTLY THEIR CUSTOMERS.
Sanjay Sahay
Have a nice evening.