Big Trouble for Bank Employees! CBI starts investigation of 8.5 lakh Mule Accounts in Banks

The Central Bureau of Investigation (CBI) is investigating several bank officials who are suspected of helping cybercrime gangs operate a huge network of fake bank accounts. According to officials, these accounts, known as “mule accounts,” were used to move and hide money earned through online frauds. The agency found that more than 8.5 lakh such accounts were being used across 743 branches of different banks in India.

A few days ago, CBI had conducted searches at 42 locations across India. These raids were part of Operation Chakra-V, a mission to stop digital frauds and scams involving fake bank accounts, also known as “mule accounts”. The CBI carried out the raids in five states — Rajasthan, Delhi, Haryana, Uttarakhand, and Uttar Pradesh — on the basis of verified information.

During the investigation, CBI found that over 8.5 lakh mule accounts were opened in more than 700 branches of different banks across India. Many of these accounts were opened without following proper guidelines and were used to move money stolen through cyber scams.

Mule accounts are bank accounts that are either fake or used in the wrong way. They are created to receive and move money that has been stolen through cyber fraud. These accounts are often opened using false documents or by fooling people into handing over their ID proof.

Serious Failures in Bank Monitoring

One of the major issues the CBI uncovered was that banks failed to generate Suspicious Transaction Reports (STRs). These reports are required whenever accounts show unusual or large transactions. Despite many accounts clearly showing signs of misuse, no STRs were filed. This shows a serious failure in following basic anti-fraud procedures.

Poor Verification of Customers

The CBI also found that banks did not perform proper Customer Due Diligence (CDD) when opening these accounts. CDD is a crucial step to verify the identity of customers and assess their risk level. Without this, banks were unable to identify fraudsters or stop risky accounts from being created.

No Extra Monitoring for High-Risk Accounts

As per Reserve Bank of India (RBI) rules, banks must carry out Enhanced Due Diligence (EDD) for accounts considered high-risk. But the CBI found that even in areas where many mule accounts were detected, bank officials failed to monitor them more closely or take preventive action.

Fake Documents and Unauthorized Accounts

The investigation revealed that many of the accounts were opened using forged documents. In some cases, accounts were opened without the real person’s knowledge or consent. Many accounts were opened in the names of illiterate people and were often operated by fraudsters through banking correspondents, avoiding direct scrutiny by bank branches.

Middlemen involved in the Scam

The CBI also found that middlemen played a key role in the scam. They worked with banking correspondents and even some bank officials to open mule accounts. These accounts were then used to receive money from victims of cyber fraud and transfer it to other places.

Weak Internal Controls and Lack of Acknowledgement

Another failure was the absence of basic checks like sending account opening confirmation letters. This step helps verify the account holder’s identity and address. The lack of such practices shows poor internal control within the banks.

Legal Action and FIR Filed

The CBI has formally registered an FIR after a detailed inquiry. So far, 10 people have been arrested, and 37 individuals have been named as accused. The agency is continuing its investigation and questioning bank officials who may have played a role in enabling this large-scale financial fraud.