RBI Cracks Down on Money Mule Accounts

The Reserve Bank of India (RBI) has proposed new rules to curb money mule accounts used for cyber-enabled financial crimes and illicit transactions. Under the draft framework, banks may impose a temporary debit hold on suspicious accounts used to transfer proceeds of cybercrime, with the hold capped at a maximum of 60 days. The RBI has invited comments and suggestions from banks and the public until October 2. After considering the feedback, the final guidelines are proposed to come into effect from April 1, 2027, though banks may adopt them earlier.

Banks will use Artificial Intelligence (AI) and Machine Learning (ML) technologies to identify suspicious transactions. A temporary debit hold may be imposed when a suspicious transfer of ₹1,000 or more is detected. Factors such as transactions deviating from the account holder’s normal pattern, unusually large deposits and links to accounts already associated with cybercrime may be considered. If the hold can be restricted to the disputed amount, the entire account need not be frozen. Banks must immediately inform customers about the reason for the hold, the process for removing it and the details of the designated officer. Customers will get 20 days to provide an explanation, after which the bank must take a decision within 10 days. In the absence of directions from police or investigating authorities, a temporary debit hold can remain for a maximum of 60 days.