CBI busts 850,000 mule accounts in 700 bank branches across five states

Nine individuals have been arrested so far, including middlemen, account holders, and bank correspondents, for their alleged involvement in the creation and operation of the mule accounts

The Central Bureau of Investigation (CBI) on Thursday said it had carried out searches at 42 locations across five states, discovering 850,000 mule accounts in more than 700 branches of various banks across India.

 

A mule account, as it is popularly known, is a bank account used by scammers to move the proceeds of financial crimes.

 

The searches, conducted under Operation Chakra-V, took place in Rajasthan, Delhi, Haryana, Uttarakhand and Uttar Pradesh. According to the investigative agency, the operation targeted the extensive use of mule bank accounts by organised cybercriminals to route and withdraw proceeds from fraudulent activities.

 

“These accounts were opened either without proper KYC (Know Your Customer) norms, Customer Due Diligence or Initial Risk Assessment. The branch managers of the banks have also failed to conduct Enhanced Due Diligence in respect of certain suspicious transaction alerts generated by the systems. Some of the banks have also failed to send the acknowledgement or thanking letters to customers to indirectly verify the addresses of the account holders,” the CBI said in a statement on its website.

FIR filed against offenders, bank officials

Based on the findings, the CBI has registered a First Information Report (FIR) under charges of criminal conspiracy, cheating, forgery and use of forged documents under the Indian Penal Code/Bharatiya Nyaya Sanhita, along with provisions under the Prevention of Corruption Act relating to misconduct by public servants.

 

The investigation also highlights the alleged involvement of bank officials, agents, aggregators, middlemen and e-Mitras who assisted in the opening and operation of these accounts. During the raids, the agency seized digital evidence, account opening documents, transaction records, mobile phones and KYC materials.

 

Nine individuals have been arrested so far, including middlemen, account holders and business correspondents who typically act as the bank's representatives in rural, underserved areas. They are accused of aiding in the creation and operation of mule bank accounts used to transfer and withdraw money obtained through cyber fraud.