Hyderabad Police Commissioner VC Sajjanar has proposed crucial changes in the banking system to tackle cybercrime effectively. He emphasized the necessity of these reforms to disrupt organized crime networks operating nationwide. The Commissioner’s recommendations aim to address the misuse of ‘mule accounts’ linked to cyber fraud incidents.
In a letter to Reserve Bank of India Governor Sanjay Malhotra, the Commissioner highlighted the prevalence of ‘mule accounts’ created under the names of unsuspecting individuals. These accounts were at the center of cyber fraud schemes uncovered during the city police’s investigation known as ‘Operation Octopus.’ The investigation revealed significant vulnerabilities and lapses in Know Your Customer (KYC) verification procedures at the branch level.
The Commissioner urged the RBI to issue strict directives to commercial banks, holding branch-level officials accountable. He also called for an immediate audit to ensure the proper implementation of KYC guidelines at the ground level. Expressing concern over instances of collusion between bank employees and cybercriminals, he cited a case at the Nasik branch of IDFC First Bank in Maharashtra where a KYC verifier misused a colleague’s credentials to create mule accounts for personal gain.
To enhance defenses against financial crimes, the Commissioner proposed the establishment of a Joint Working Group involving representatives from the RBI, banking institutions, and law enforcement agencies. This group would monitor and address issues related to mule accounts regularly. Additionally, he emphasized the importance of banks leveraging advanced technology to identify suspicious transactions in real-time.
In light of rising fraudulent activities on social media platforms like WhatsApp and Telegram, the Commissioner advised the public to stay vigilant against misleading advertisements promising high returns. He cautioned against responding to video call interrogations or demands for money in the name of ‘digital arrests.’ Furthermore, he warned individuals against renting out their bank accounts for illicit purposes, emphasizing that account holders would be held accountable for any criminal activities conducted through their accounts.
