Money laundering via mule accounts used by fraudsters to transfer one crore ,RBI alert

New Delhi July 21: Reserve Bank of India(RBI) has issued a warning to all state banks that fraudsters,Ponzi schemes  and other illegal money schemers have found new methods of transferring money into accounts without the knowledge of the account holder .The central bank has warned that all idle zero balance accounts and new account opened under the flagship of Pradhan Mantri Jan Dhan Yojana (PMJDY) are vulnerable to fraudulent money mule routes of laundering as reported in Indian Express

This particular  incident came to light  when  an accidental discovery of a labourer’s idle bank account being used by fraudsters to receive and transfer funds to the tune of Rs 1 crore, without the account holder’s knowledge and when the income tax authorities served a notice to the Punjab-based daily wager.

Banks have been informed to check the failure of their systems and incremental processes to monitor such vulnerable accounts.

Reserve Bank deputy governor S S Mundra said banks should have a proper mechanism to monitor transactions in these accounts.

Money mule is a term used to describe victims who are duped by fraudsters into laundering illegal money via their bank accounts.

Lots of instances of cases of email phishing in the past where fraudsters typically contact customers through emails, chat rooms, job websites or blogs, and convince them to receive money into their bank accounts in exchange for a commission.

Government data reports that idle zero-balance accounts as a percentage of total accounts have decreased to about 24 per cent during January-June 2016, down from over 30 per cent.

Alongside the issue of money muling, another worry for RBI could be the problem of a rise in duplication of accounts under the PMJDY.

Around 33 per cent of the customers indicated that PMJDY was not their first account, in comparison to 14 per cent in wave II and I ,as per survey conducted by the  consulting firm MicroSave.

Mundra warned if banks fail to take proactive measures to stop such transactions, it could face some action from RBI as well as other enforcement agencies.

the failure to guard against misuse of customer accounts, might result in banks incurring supervisory sanctions and enforcement action from the RBI.

It can have the money laundering angles and there could be action from the various enforcement agencies as well,” he added.