India’s cyber fraud ecosystem is witnessing a major shift as criminal groups move operations from well known hotspots to quieter regions with lower surveillance. Mule accounts once commonly linked to areas such as Jamtara in Jharkhand and Nuh in Haryana are now being detected in significant numbers across parts of Madhya Pradesh, Karnataka and Assam.
A recent multi agency review meeting revealed a sharp surge in mule accounts in districts such as Katni and Shajapur in Madhya Pradesh, Kalaburagi in Karnataka and several locations across Assam. The trend indicates that sustained crackdowns and tighter vigilance in traditional hubs are pushing fraud networks to relocate to less monitored pockets.
Mule accounts, which are bank accounts used to channel illegal funds while masking the identity of the real criminals, have now become central to cyber enabled financial crime.
In one of the largest enforcement actions so far, banking authorities have frozen nearly eight lakh fifty thousand mule accounts spread across seven hundred branches nationwide. The extensive crackdown highlights the scale at which these networks have expanded.
Fraud monitoring teams report that cybercriminals are continuously adapting their tactics. One rising method involves using online gaming platforms and in game purchases to move money across borders while hiding transaction trails. Cyber criminals are also targeting bank branches and digital channels where KYC processes remain weak. Once a loophole is identified and closed, they quickly shift to a new institution, region or platform.
Addressing an event at the Delhi School of Economics, the RBI Governor said the central bank is strengthening the financial system’s security framework in response to these evolving fraud patterns. The RBI is expanding data sharing with the Indian Cybercrime Coordination Centre and integrating banks with real time datasets from the NPCI and the National Crime Reporting Portal. These linkages aim to improve the detection of suspicious accounts and high risk transactions.
Fraud analytics firms note that a sudden rise in KYC rejections is often an early warning sign of upcoming fraud clusters. An analytics company reported observing a steep rise in fake or faulty KYC submissions in districts such as Katni and Shajapur in late 2024, with similar patterns spreading to Vidisha, Rewa and Kalaburagi in 2025.
To strengthen early detection, the RBI has rolled out Mule Hunter, an AI based tool developed by the Reserve Bank Innovation Hub. According to its CEO, the system is identifying nearly twenty thousand mule accounts each month, significantly boosting efforts to curb digital financial crime.
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