What a shame has the banking industry has brought us to? The underbelly of the Indian financial system is incompetent to even react to the worst challenges. Core banking software and apps are all the banks have on offer claiming convenience, experience and digital bliss. The fate of the loan takers and the experience what they go through is a different story. One of the leading private sector banks, HDFC was stopped from issuing new credit cards in 2020 by the RBI due to outages and technical glitches in its system. The country has not forgotten the court ordered compensation against ICICI for using forceful or improper recovery methods in 2007.
The litany of banking woes for the customer and the country does not end here. We all saw the shameful state of affairs of the State Bank of India when the Supreme Court had directed it to produce details of the electoral bond. About the NPAs the less said the better. Their indifference to public money is monumental, besides the professionalism, expertise and ethics. The system lacks integrity. The Mehul Choksi and the Punjab National Bank love story, will go down as a milestone in India’s banking history. ICICI’s Chanda Kochhar case is a perfect example of how the fence can eat the crop. And now the all pervasive KYC becomes a sham.
The headline blares, “India’s Hidden Banking Scandal: 8.5 Lakh Mule Accounts Uncovered in CBI Mega Raids.” This is something tantamount to the Indian banking industry’s Panama Papers. The dark underbelly is out in the open. “Indian Mule Banking Industry,” can be the only name for a banking network having 8.5 lakh mule accounts. Rampant cyber crime is made out to be a challenge thrown by cyber crooks to the Police. The conduit, the real facilitator, gets off scot free. A facilitator is a natural accused, more so, when it is there in the public domain on a daily basis.
In one of India’s largest crackdown on cyber enabled cyber crimes (read as bank’s enabled cyber crimes) the CBI has launched simultaneous raids at 42 locations across five states unearthing a staggering network of over 8.5 lakh mule accounts operating across more than 700 branches nationwide. This was done under the ongoing Operation Chakra-V. Organised cybercrime syndicates were successfully laundering through official banking channels. The conduit accounts popularly known as Mule Accounts are used to receive, layer, and disburse illicit funds swiftly, obscuring money trails and frustrating law enforcement efforts. What a naive, incompetent and inefficient banking infra we have created where both professional bankers and a huge dose of technology can just be bystanders, if not conspirators.
KYC ENABLED SYPHONING OF CYBER CRIME PROCEEDS, MODUS OPERANDI WELL KNOWN, IS THE ULTIMATE DISGRACE TO THE INDIAN BANKING INDUSTRY.
Sanjay Sahay
Have a nice day.