Hyderabad Police Chief Tells Banks to End Mule Accounts to Fight Cybercrime

The Hyderabad police chief recommended the introduction of a twin-challenge framework to reorient bank branch priorities away from account-opening targets and towards citizen safety and institutional integrity.

He strongly advocated that both these challenges should be embedded as formal Key Performance Indicators (KPIs) at the branch level, with branches achieving compliance to be formally recognised and rewarded by higher officials of the bank.

The Police Commissioner held a conclave of senior bank officials to address bank account misuse and strengthen cyber fraud prevention.

The conclave was held in the wake of Operation Octopus -- the Hyderabad City Police's coordinated two-phase initiative to dismantle organised cyber fraud networks -- and the subsequent arrest of bank officials found potentially complicit in the opening of mule accounts.

The meeting, which was chaired by the Commissioner, was co-attended by Additional Commissioner of Police, Crimes & SIT, M. Srinivasulu, and Reserve Bank of India's Regional Director Chinmoy Kumar.

The coordination meeting was attended by 75 representatives from 45 public and private sector banks.

The Commissioner said that no customer should fall victim to cybercrime. Zero cybercrime victims is the measurable target - to be monitored via NCRP complaint data linked to the branch.

"No mule account should be opened at the branch. Strict KYC compliance, enhanced due diligence, and real-time monitoring are the operational requirements underlying this target," he said.

The Commissioner emphasised that bank managements must not treat the volume of account openings as a performance metric. Branches that prioritise targets over diligence are the primary entry points for fraud networks. Safe customer and zero mule account outcomes - not account volumes - must define branch performance, he added.

He told the banks that they must adopt a policy of zero tolerance towards cybercrime at every level of the organisation - from frontline staff to senior management.

Key Performance Indicators (KPIs) for branches must incorporate monitoring of NCRP complaints attributed to the branch, with proactive remediation expected, he said.

Bank staff must demonstrate empathy and offer prompt, structured support to customers who have fallen victim to cyber fraud - including guiding victims to the national helpline (1930) and the cybercrime portal (cybercrime.gov.in).

Strict disciplinary action must be taken against KYC verifiers found to be involved in fraudulent account openings, accompanied by periodic forensic audits of accounts opened by flagged officials. Any employee found complicit with cyber criminals should be blacklisted across the banking and financial services ecosystem.

Advanced technological tools - including solutions such as Mule Hunter - must be adopted to detect and prevent mule account activity in real time.

Sajjanar said customers seeking to prematurely close Fixed Deposits must be proactively cautioned and verified, particularly where fund transfers are involved, to intercept cyber fraud in progress.

The Commissioner provided a detailed briefing on the operating methods of cyber fraud syndicates currently active across India. These networks are primarily headquartered in countries including Cambodia, Vietnam, and the UAE, and engage intermediaries within India to procure bank accounts by colluding with bank officials - particularly KYC verifiers - to facilitate the siphoning of funds from Indian victims.

The briefing underscored the transnational and organised nature of these networks, and the critical role that insider banking complicity plays in enabling them.

- IANS