Hyderabad: Hyderabad Police Commissioner V. C. Sajjanar flagged mule accounts cybercrime and urged the Reserve Bank of India to introduce reforms to curb organised financial fraud.
In a letter to RBI Governor Sanjay Malhotra on Tuesday, he said cybercriminals were using bank accounts opened in the names of unsuspecting individuals. These accounts, he noted, had become central to fraud networks operating across the country.
The observations followed the city police’s ‘Operation Octopus’ investigation, which exposed lapses in KYC verification at bank branches. According to officials, weak compliance and negligence enabled the creation of such accounts.
Mule accounts cybercrime linked to KYC lapses and bank staff collusion
Sajjanar asked the RBI to issue strict directions to banks to fix accountability at the branch level. He also recommended a system-wide audit to ensure proper implementation of KYC norms.
He cited instances where bank employees allegedly colluded with fraudsters. In one case at an IDFC First Bank branch in Nashik, a staff member reportedly misused credentials to create mule accounts for commissions.
The Commissioner noted that such irregularities appeared more frequently in private banks. Therefore, he suggested that officials involved in cybercrime should face blacklisting after arrest or chargesheeting.
He also proposed forming a joint working group involving the RBI, banks, and police agencies. The group, he said, should regularly review the issue and strengthen safeguards.
Further, he stressed the need for banks to adopt advanced technology to detect suspicious transactions in real time.
Separately, Sajjanar advised citizens to remain cautious about fraudulent offers on platforms such as WhatsApp and Telegram. He clarified that law enforcement agencies do not conduct interrogations through video calls or demand money under the guise of digital arrests.
He warned against renting out bank accounts for commissions, stating that account holders would face legal consequences for misuse.
In a significant move to combat the rising tide of cybercrime, Hyderabad City Police Commissioner Sri VC Sajjanar, IPS has suggested for certain critical changes in the banking system, stating that such reforms are imperative to dismantle the organized syndicates operating across…
— Hyderabad City Police (@hydcitypolice) April 21, 2026