Banks sought permission from RBI to freeze accounts doing illegal transactions. Know why

Banks have demanded from the Central Reserve Bank and the government that they should be given the right to freeze such suspicious mule accounts immediately. So that the accounts can be closed as soon as information about such cases is received. So that cases of fraudsters opening fake accounts or making fake transactions can be stopped.

Freeze accounts: To curb the rapidly increasing cyber crimes and illegal transactions in the country, banks have sought the right to immediately seize mule accounts from the government and the Reserve Bank of India. Banks say that they have to take permission from the authorities to close such accounts. This wastes a lot of time. Fraudsters carry out illegal transactions in the banking system through fake accounts.

What are Mule Accounts

Mules are bank accounts that are used for criminal activities. Such as cyber fraud, money laundering, tax evasion, digital fraud etc. Such accounts are usually opened in the name of a third person. These are either fake or are unaware of such accounts. Illegal money is transferred from one place to another through these accounts so that its source can be hidden. The money deposited in such accounts is withdrawn in cash or sent to foreign accounts.

What is the demand of banks

Banks have demanded from the Central Reserve Bank and the government that they should get the right to freeze such suspicious mule accounts immediately. So that the accounts can be closed as soon as information about such cases is received. So that cases of opening fake accounts of fraudsters or making fake transactions can be stopped.

What is the rule now

Under the Prevention of Money Laundering Act, banks have to take permission from the enforcement agency or the court to seize such accounts. This takes a lot of time, and those committing banking crimes take advantage of this.

Recommendation of the Indian Bank Association

The Indian Bank Association has also suggested to the RBI that banks should be given this right. So that banks can take immediate action on such fake accounts. Apart from this, there has also been a demand to strictly follow the KYC norms and make the verification processes more stringent.

Banks gave suggestions

To make it easier to identify mule accounts, banks have suggested that machine learning and artificial intelligence should be used. So that transactions can be monitored through technology and such fake accounts can be identified on time.

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