RBI develops novel tool to tackle mule accounts, digital fraud: All you need to know about MuleHunter.AI
- This will help the banks deal with the issue of mule bank accounts expeditiously and reduce digital fraud.
The Reserve Bank of India (RBI), as part of its efforts to prevent and mitigate digital financial fraud, developed an innovative AI/ML-based model called MuleHunter. The AI model was developed by the Reserve Bank Innovation Hub (RBIH) in Bengaluru.
This will help the banks to deal with the issue of mule bank accounts expeditiously and reduce digital fraud.
A mule account is a bank account used by criminals to launder illicit funds, often set up by unsuspecting individuals lured by promises of easy money or coerced into participation. The transfer of funds through these highly interconnected accounts makes it difficult to trace and recover the funds.
The RBI on Friday asked banks to collaborate with its initiative MuleHunter.AI to weed out mule accounts which are used to commit financial fraud.
“Use of money mule accounts is a common method adopted by fraudsters to channel proceeds of frauds,” Reserve Bank Governor Shaktikanta Das said.
The RBI is currently running a hackathon on the theme 'Zero Financial Frauds' which includes a specific problem statement on mule accounts, to encourage development of innovative solutions to contain the use of mule accounts, he also said.
Bid to detect mule bank accounts
According to the central bank, this model enables detection of mule bank accounts in an efficient manner. A pilot with two large public sector banks has yielded encouraging results.
“Banks are encouraged to collaborate with RBIH to further develop the MuleHunter.AI initiative to deal with the issue of mule bank accounts being used for committing financial frauds,” the RBI governor said.
The RBI has been taking various measures in coordination with banks and other stakeholders to prevent and mitigate digital fraud in the financial sector.
These include RBI guidelines for regulated entities to strengthen cybersecurity, cyber fraud prevention and transaction monitoring.
Das also announced to constitute a panel to develop a Framework for Responsible and Ethical Enablement of AI (FREE-AI) in the financial sector.
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First Published:6 Dec 2024, 08:26 PM IST
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