The Reserve Bank of India (RBI) on Friday announced that a pilot project with two large public sector banks using its MuleHunter.AI solution to identify mule bank accounts has yielded encouraging results. The RBI has urged other banks to join the initiative.
Banks are encouraged to collaborate with the Reserve Bank Innovation Hub (RBIH) to further develop the MuleHunter.AI initiative, which aims to address the issue of mule bank accounts used for committing financial fraud, the central bank stated.
MuleHunter.AI is an advanced AI technology designed to identify and flag mule accounts, which are commonly used in money laundering schemes. These accounts are a frequent method employed by fraudsters to channel the proceeds of illicit activities.
According to the RBI, a mule account is a bank account used by criminals to launder illicit funds. These accounts are often set up by unsuspecting individuals lured by promises of easy money or coerced into participation. The transfer of funds through such highly interconnected accounts makes it challenging to trace and recover the money.
The AI/ML-based model, MuleHunter.AI, is being piloted by RBIH, a subsidiary of the RBI. This model enables the efficient detection of mule bank accounts, the central bank noted.
Data from the National Crime Records Bureau (NCRB) indicate that online financial fraud accounts for 67.8% of all complaints related to cybercrime. This underscores the urgent need for effective fraud prevention tools like MuleHunter.AI. Money mule accounts are a significant enabler of illicit financial activities, making such tools crucial for protecting the financial ecosystem and combating cybercrime.
The RBI has implemented various measures in coordination with banks and other stakeholders to prevent and mitigate digital fraud in the financial sector. These measures include issuing guidelines to regulated entities for strengthening cybersecurity, improving cyber fraud prevention, and enhancing transaction monitoring.
Additionally, the Reserve Bank is conducting a hackathon on the theme “Zero Financial Frauds,” which includes a specific problem statement on mule accounts to encourage innovative solutions for curbing their use.