Sajjanar Urges RBI to Act Against Mule Accounts and Strengthen Banking Controls

Raising serious concerns over rising cyber fraud, City Police Commissioner Sajjanar has urged the Reserve Bank of India to take immediate steps to curb the misuse of bank accounts across the country.

In a detailed communication to the RBI Governor, he highlighted how mule accounts have become a major tool for cybercriminals. These accounts, often opened using unsuspecting individuals, are being widely used to move illegal funds and execute frauds.

The issue gained prominence during a recent high profile police investigation that uncovered widespread lapses in KYC verification at the branch level. According to officials, weak monitoring and procedural gaps have allowed such accounts to operate without proper scrutiny.

Sajjanar stressed the need for stricter guidelines and called for fixing accountability on bank staff responsible for lapses. He recommended a system wide audit to ensure that KYC norms are properly implemented across all branches.

He also pointed to instances of internal misconduct within banks, where employees allegedly misused access credentials to create fraudulent accounts for commissions. Such cases, he noted, underline the urgency for structural reforms and stronger internal checks.

As part of broader reforms, he suggested that any bank official found involved in cybercrime should face strict action, including being barred from working in the banking system. He also proposed forming a joint working group involving regulators, banks and law enforcement agencies to monitor the situation.

Highlighting the role of technology, Sajjanar emphasized the need for real time monitoring systems that can detect suspicious transactions instantly and prevent fraud before it spreads.

With cybercrime networks becoming more organised, the call for tighter banking controls reflects growing pressure on regulatory bodies to act swiftly and protect financial systems from misuse.