MHA, RBI Harness AI To Detect, Shut Down Mule Accounts

After shell companies, now "mule" accounts have become a major challenge for enforcement agencies to detect and retrieve the money, particularly in cases of financial frauds that target gullible people online. 

A mule account is a bank account used by scammers to transfer stolen money. The person who owns the account is called a "money mule".

To meet this challenge, the government has now devised a plan to deploy Artificial Intelligence (AI) tools to identify and close the mule accounts before they are made operational to launder money generated through cyber fraud.

This was announced by Union Minister for Home Amit Shah at a meeting of the Parliamentary Consultative Committee for the Ministry of Home Affairs (MHA) on ‘Cyber Security and Cyber Crime’.

In the meeting, Shah said, “Efforts are underway to use AI tools for identifying mule accounts, in coordination with the Reserve Bank of India (RBI) and all other commercial banks, to establish a system for their detection to ensure that the money defrauded is not laundered.”

Commenting on the Home Minister's announcement, experts are of the opinion that AI will be handy in detecting mule accounts, since there is a pattern in the transactions in such accounts, which could be detected in real time.

“Given the quantum and number of online transactions taking place in the country, it is next to impossible to detect mule accounts manually. If we apply AI tools, it can provide investigative and banking personnel leads about such abnormal transactions in real time, and quick actions can be initiated to retrieve and restore money to legitimate owners,” said a senior official associated with Indian Cyber Crime Coordination Centre (I4C) under the MHA.    

Officials in the MHA said there has been an expansion of digital infrastructure in India and that has led to an increase in the number of cyberattacks. “The government is now looking at cyberspace from a different perspective, as it forms a complex network of software, services and users, and we need to control them to deal with issues in the cyberspace,” said a senior MHA official.

According to data available with the government, 95 per cent villages in the country are digitally connected, and one lakh gram panchayats are equipped with wi-fi hotspots. In the past 10 years, the number of internet users has increased by 4.5 times.

The government data further revealed that in 2024, a total of 246 trillion transactions worth Rs 17.221 lakh crore were made through UPI, which is 48 per cent of total global digital transactions.

A senior MHA official said, “In terms of the startup ecosystem, India has become the third-largest country in the world. In 2023, the contribution of the digital economy to the GDP was around Rs 32 lakh crore, which is 12 per cent. And this has created nearly 15 million jobs.”

The official added that over 19 crore people have used the I4C portal, and a total of 1,43,000 FIRs have been registered on it. Based on I4C’s recommendations, 805 apps and 3,266 websites have been blocked for national security reasons.

“More to these 399 banks and financial intermediaries have come on board. Over 6 lakh suspicious data points have been shared, over 19 lakh mule accounts have been caught, and suspicious transactions worth Rs 2,038 crore have been prevented,” the official said, adding that Cyber Crime Forensic Training Labs have been established in 33 states and Union Territories.

“On ‘CyTrain’ — a Massive Open Online Course (MOOC) platform — 101,561 police officers have registered, and over 78,000 certificates have been issued," he added.