Money mules

Source: Economic Times

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Context

• Indian banks are tightening controls on new accounts amid rising money mule activities, involving fraud detection, stricter verification and RBI interventions.

Details

Key points:

• Digital frauds and money laundering are increasing in India with most of the criminals using mule accounts to move money.
• These accounts are opened by sole proprietors or individuals to transfer funds anonymously.
• Banks has made strict rules to open such accounts by requiring more documents and verification visits.
• The government has initiated Indian Cyber Crime Coordination Centre (I4C) to combat mule accounts.

Money Mule

• Definition:
  • A money mule is an individual who transfers or moves illegally acquired money on behalf of another person or organization.
• Criminal Activities:
  • It proceeds through online scams, frauds, human trafficking and drug trafficking.
• Methods of transferring funds:
  • Bank accounts, Cashier's checks, Virtual currency, Prepaid debit cards, Money service businesses.
• Prevention Measures:
  • Educating the public about the risks and signs of becoming a money mule.
  • Strengthening banking and regulatory measures to detect and prevent mule activities.

Sources:

Economic Times