RBI develops AI model to identify fradulent bank accounts
What's the story
The Reserve Bank of India's Innovation Hub (RBIH) has introduced an artificial intelligence model, named MuleHunter AI.
This innovative tool is designed to assist banks and financial institutions in identifying mule accounts, a growing concern in the financial sector due to their potential use for fraudulent activities.
By employing artificial intelligence and machine learning technologies, the model can significantly outperform traditional rule-based systems in detecting mule accounts.
Implementation
MuleHunter AI already deployed in public sector bank
MuleHunter AI has already been implemented in a major public sector bank, an industry insider told Moneycontrol. Plans are underway for its deployment across other banks as well.
This development comes at a time when India is experiencing a surge in digital transactions, increasing the risk of financial crimes such as those involving mule accounts.
Fraudulent activity
Mule accounts: A tool for financial crimes
Mule accounts, often used for money laundering and tax evasion, are created by one individual but controlled by another.
These accounts violate several regulations and can be prosecuted under the Prevention of Money Laundering Act (PMLA).
They are also deemed illegal under tax laws as well as rules set by the Securities and Exchange Board of India (SEBI) and the RBI.
Cybercrime statistics
Alarming rise in online financial frauds
Data from the National Crime Records Bureau (NCRB) reveals that online financial frauds accounted for a staggering 67.8% of all cybercrime complaints received in Q2 2025.
Between 2020 and 2022, cases of fraud rose by 31%, culminating in an alarming total of 150,000 registered cases in 2022.
In a recent high-profile case, the manager of a State Bank of India branch in Hyderabad was apprehended for a ₹175 crore scam involving mule accounts.
Anti-fraud measures
Banks and financial institutions intensify efforts against mule accounts
The RBI has been urging banks to intensify their efforts against mule accounts.
Following RBI Governor Shaktikana Das's call to action, several banks and financial institutions have taken steps to identify mule accounts.
For instance, IDFC First Bank plans to implement a system that will access transaction data from other banks and their new customers through payment aggregators.
SEBI has also initiated a crackdown on mule accounts as part of these intensified efforts.