CBI Busts Nationwide Mule Account Network, 8.5 Lakh Fake Bank Accounts Linked To Cyber Fraud

The Central Bureau of Investigation (CBI) has uncovered a massive network of approximately 8.5 lakh mule bank accounts operating through over 700 branches across India, used by cybercriminals to launder money obtained through digital fraud, impersonation, fake investment schemes, and UPI-related scams.

According to ANI, it was part of a broader inquiry conducted by the agency, culminating in a coordinated operation at 42 locations across Rajasthan, Delhi, Haryana, Uttarakhand, and Uttar Pradesh. Nine individuals, including alleged intermediaries, account holders, agents, aggregators, and banking correspondents, were detained during the operation. These individuals are suspected of playing key roles in facilitating the creation and operation of these fraudulent accounts.

Mule accounts are typically opened under the names of individuals, sometimes without their knowledge, and used to transfer illicit funds. The CBI investigation revealed that these accounts were created using forged documents and served primarily as temporary channels to move stolen funds. In many instances, the accounts were used only once before being shut down, making it difficult to trace the perpetrators.

Preliminary findings indicate that some bank employees, e-Mitra agents, and third-party facilitators may have colluded with fraudsters, helping to create these accounts and withdraw funds. The agency noted that many of these accounts were opened without adherence to proper Know Your Customer (KYC) protocols, risk assessments, or customer due diligence, and that suspicious transactions were not adequately followed up by branch officials.

According to The Hindu, the CBI also found serious procedural lapses, including failures to send confirmation letters to verify customer addresses, which is a standard practice. Violations of Reserve Bank of India (RBI) guidelines and internal banking protocols were also reported.

Following the inquiry, the CBI registered a First Information Report (FIR) under sections related to criminal conspiracy, cheating, forgery, use of forged documents, and criminal misconduct by public servants under the Prevention of Corruption Act.

During the search operation, officials seized mobile phones, digital evidence, bank account opening forms, KYC documents, and transaction records, and identified several individuals suspected of involvement in facilitating the mule account network.