Banking System Exploited in Cyber Fraud: Central Bureau of Investigation
In a massive crackdown on cybercrime, the Central Bureau of Investigation (CBI) has carried out coordinated raids at 42 locations across five Indian states—Delhi, Rajasthan, Haryana, Uttarakhand, and Uttar Pradesh. Dubbed “Operation Chakra-V”, this nationwide operation was launched to dismantle the deep-rooted infrastructure that supports a variety of online frauds, especially those involving mule bank accounts.
According to official sources, the CBI’s probe has unearthed a well-organised network of cybercriminals exploiting India’s banking ecosystem to facilitate cyber frauds. These crimes include digital arrest scams, impersonation, fraudulent online advertisements, fake investment offers, and UPI-based financial frauds.
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Mule Accounts: The Core of the Scam
CBI investigators revealed that cybercriminals were using mule bank accounts—accounts created or used solely to move illegally obtained money—to transfer the proceeds of these frauds. Shockingly, the agency found that more than 700 branches of different banks across the country had opened around 8.5 lakh such mule accounts.
These accounts were frequently opened in violation of Know Your Customer (KYC) norms and without adequate Customer Due Diligence (CDD). In several cases, branch managers failed to act on suspicious transaction alerts, and some banks did not even send address verification letters to the account holders, which is a mandatory regulatory requirement.
Inside Help: The Role of Bank Staff and Middlemen
The investigation has also exposed the involvement of bank officials, agents, aggregators, bank correspondents, middlemen, and even e-Mitras (digital service providers). These insiders played a crucial role in the opening and operation of mule accounts, either for financial incentives or by turning a blind eye to the discrepancies.
The CBI has collected extensive digital and physical evidence during its raids. Seized materials include bank account opening documents, KYC papers, transaction records, mobile phones, and other digital devices linked to fraudulent activities.
9 Arrested in Multi-State Operation
As part of this sweeping crackdown, the agency has arrested nine individuals who were directly involved in the creation or facilitation of these bogus bank accounts. The arrested accused have been identified as:
- Lovkesh Shakya (Delhi)
- Savan Kumar (Delhi)
- Vishal (Delhi)
- Farman Beg (Uttarakhand)
- Purushottam (Uttarakhand)
- Shubham Kamboj (Uttar Pradesh)
- Umardeen (Uttar Pradesh)
- Yousuf (Rajasthan)
- Ashok Kumar (Rajasthan)
These individuals include agents, middlemen, bank correspondents, and account holders who played key roles in enabling cyber fraud networks to flourish.
A Broader Effort Against Cybercrime
The CBI has stated that Operation Chakra-V is part of the Government of India’s broader commitment to combat cybercrime. The agency is not only focused on arresting the offenders but also on dismantling the operational and financial infrastructure that supports such fraudulent activities.
Officials emphasized that this operation sends a strong message to those misusing the financial system for unlawful purposes. The CBI has also indicated that further arrests and legal action may follow as the investigation progresses.
What Are Mule Accounts?
A mule account is a bank account used to move funds acquired illegally. Fraudsters often use unsuspecting or complicit individuals to open these accounts and then use them to launder money or obscure the origin of stolen funds. These accounts are a common tool in various cybercrime schemes, as they allow fraudsters to remain anonymous while quickly transferring funds.
Public Advisory
The CBI has urged citizens to be cautious of offers or agents promising financial rewards in exchange for opening bank accounts. Individuals are also advised not to share personal banking credentials and to report any suspicious activities to the nearest cybercrime unit or police station.
Conclusion
CBI’s Operation Chakra-V highlights the growing threat of cybercrime in India and the critical role that banking institutions and their compliance systems play in either curbing or enabling such activities. With over 8.5 lakh mule accounts exposed and the arrest of key players, this operation could serve as a major deterrent in the battle against online financial fraud.
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