Cyber criminals on the prowl: CBI detects over 8.5 lakh mule accounts; 700 bank branches used

In one of the biggest operations against cyber-enabled financial fraud in recent times, the Central Bureau of Investigation (CBI) has uncovered over 8.5 lakh mule bank accounts spread across more than 700 branches nationwide.

These accounts, according to officials cited by PTI, were being exploited by cybercriminals to launder money acquired through online scams, including digital theft, impersonation, fake investment schemes and UPI-based fraud.The discovery comes after a coordinated search operation carried out at 42 locations across Rajasthan, Delhi, Haryana, Uttarakhand and Uttar Pradesh. Nine people, including alleged middlemen, banking agents, account holders, and aggregators, were taken into custody for their suspected involvement in the racket.Mule accounts are typically opened in the names of individuals who may or may not be aware that their credentials are being used to launder illicit funds. These accounts, the agency says, were created using forged identity documents and served as temporary conduits through which money was routed and then quickly moved to other accounts."We have observed that mule accounts are being used only once in most cases. Once the money comes into the account, it is distributed to other accounts, and the mother account is closed, making it difficult to catch the criminal," a senior CBI official told PTI.

According to the CBI’s preliminary findings, some bank officials, e-Mitra agents, and third-party facilitators may have played an active role in enabling these fraudulent accounts. In several instances, bank staff reportedly failed to carry out even basic KYC checks, due diligence, or act on suspicious transaction alerts."Enquiry revealed that more than 700 branches of various banks across India have opened around 8.5 lakh mule accounts.

These accounts were opened either without proper KYC 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," the CBI spokesperson said in a statement.The agency also pointed to systemic lapses, with some banks not even sending basic address confirmation letters to new customers, a standard step to verify legitimacy.Violations of guidelines under the Reserve Bank of India’s master circulars, as well as internal policies of the banks themselves, were also uncovered during the enquiry.The CBI has now registered an FIR under charges of criminal conspiracy, cheating, forgery, using forged documents as genuine, and criminal misconduct by public servants under the Prevention of Corruption Act.During the operation, officials seized digital evidence, mobile phones, bank account records, KYC documents, and transaction details. The agency is now in the process of identifying more individuals involved in the creation and operation of these mule accounts.The investigation is ongoing.