Updated 08:43 IST, July 4th 2024
RBI Guv urges banks to intensify efforts against 'Mule Accounts'
Mule accounts violate several laws, including the Prevention of Money Laundering Act (PMLA) and tax regulations.

Mule Accounts: Reserve Bank of India (RBI) Governor Shaktikanta Das met with the managing directors and CEOs of public sector banks and select private sector banks in Mumbai on July 3, urging them to step up their efforts against 'mule accounts'. He emphasised the need for banks to enhance customer awareness and educational initiatives to curb digital fraud.
What are mule accounts?
A mule account is created by one person but operated by another, often used for money laundering and tax evasion. These accounts violate several laws, including the Prevention of Money Laundering Act (PMLA) and tax regulations. Both the Securities and Exchange Board of India (Sebi) and RBI rules prohibit the use of such accounts.
Mule accounts violate several laws, including the Prevention of Money Laundering Act (PMLA) and tax regulations. Both the Securities and Exchange Board of India (Sebi) and RBI rules prohibit the use of such accounts.
Governor Das stressed the importance of banks implementing robust cybersecurity controls and effectively managing third-party risks to protect against digital fraud. The meeting covered various critical topics, such as the persistent gap between credit and deposit growth, liquidity risk management, asset-liability management (ALM) issues, trends in unsecured retail lending, and the overall cybersecurity landscape.
Additionally, discussions included strengthening assurance functions, improving credit flows to Micro, Small & Medium Enterprises (MSMEs), increasing the use of the Indian Rupee for cross-border transactions, and enhancing banks’ participation in RBI's innovation initiatives.
Governor Das also highlighted the necessity for banks to further strengthen their governance standards, risk management practices, and compliance culture to ensure the stability and integrity of the banking system.
The RBI's proactive measures aim to safeguard the financial system and enhance the resilience of banks against emerging risks and challenges in the digital era.
Published 08:43 IST, July 4th 2024