DailyPost 2987
CAN WE NOT SORT OUT THE MULE ACCOUNT MESS?
Festering wounds is a part of our destiny but that could extend to business and technical solutions also is certainly not a natural corollary. Mule accounts seems to have fallen into this trap. Nicknamed as mule accounts, these accounts are used to siphon off money from a variety of nefarious crimes, most of it has been of a recent creation, facilitated by all that hyperconnected digital world has to offer. All the new age crimes converge in these accounts to make good the booty.
KYC was supposed to transform dummy, benami and all sorts of other dubious bank accounts to a completely relatable and clean accounts. The digital honeymoon continued for some time and then it all starting breaking up. Today it has reached it is difficult to a level where it is difficult to believe whether many of these accounts have gone through the KYC process. The notoriety of mule accounts can be gauged from the fact that today, it has become the main stumbling block in our fight against moneylending, investment and digital arrest scams.
The problem statement is very clear. The preconditions under which an account can be declared a bogus, fake or illegal account is also known. It has to be worked upon to some extent so that explanation satisfies the law, might be new terms and conditions and checks needs to be added to. Whether physical verification is a mandated provision remains unknown, but if that were to be so, lots of issues prior to the opening of the account could be sorted out to the satisfaction of the bank.
Verification of references / neighbors would also immense value validating both his existence and income / financial standing. This process has to be done with existing suspect accounts to start with. Looking at biometric KYC can be another way for looking at a likely solution. The non-existence of dummy / mule accounts is critical to this battle against cyber-crime. The nature and behavior of transactions themselves would throw up any number of red flags. Professional bankers are trained into it and they do develop an acumen for this task. Facilitated by technology it is certainly a doable task. The parameters so deciphered and agreed upon can be factored in as business logic in the core banking software. This would send right message to the cyber criminals.
THE CHALLENGE OF MULE ACCOUNTS HAS TO BE FOUGHT HEAD ON AND RESOLVED.
Sanjay Sahay
Have a nice evening.