RBI’S MULE HUNTER: ECONOMY

RBI’S MULE HUNTER: ECONOMY

NEWS: RBI unveils MuleHunter to prevent digital frauds 

WHAT’S IN THE NEWS?

The RBI launched Mule Hunter, an AI-ML-powered system to detect and combat digital frauds involving mule accounts, leveraging centralized real-time data from all banks and payment operators. Mule accounts are used to transfer illegally acquired money, with account holders (mules) either knowingly or unknowingly facilitating fraudulent transactions.

What is Mule Hunter?

Purpose:

  • Designed to identify and mitigate fraudulent activities linked to mule accounts.
  • Helps ensure the integrity of digital banking and payment systems.

Key Features:

  1. AI-ML Algorithms:
  • Uses advanced algorithms to detect patterns associated with financial fraud.
  1. Comprehensive Database Access:
  • Leverages data from all banks and payment operators to analyze fraud trends.
  1. Real-Time Detection:
  • Operates as an infrastructure-level setup, enabling immediate identification and resolution of mule account activities.
  1. Centralized Approach:
  • Provides a unified platform to support all banks and payment systems.
  1. Quick Resolution:
  • Facilitates faster handling of mule account cases, reducing delays in investigations.

Developer:

  • Created by the Reserve Bank Innovation Hub (RBIH), Bengaluru.

What is a Mule Account?

Definition:

  • A mule account is a bank account used to transfer or launder illegally acquired money, obscuring its origin and making it appear legitimate.

How it Works:

  • Criminals recruit individuals (mules) to open or use their accounts for illegal transactions.
  • The mule transfers the bulk of the money to another account, often keeping a small percentage as a commission.

Purpose:

  • Used in activities like money laundering, fraud, and terrorist financing.

Types of Mules:

Unwitting Mules:

  • Tricked into believing the transaction is legitimate, such as through fake job offers or charity schemes.

Witting Mules:

  • Individuals who knowingly participate in the fraudulent scheme in exchange for payment.

Significance of Mule Hunter:

  • Strengthens the banking system by reducing the risk of digital fraud.
  • Enhances trust in payment systems by identifying and acting against fraudulent activities.
  • Centralized fraud detection reduces operational delays and inconsistencies in fraud management across banks.

Source: https://www.thehindu.com/business/rbi-unveils-mulehunter-to-prevent-digital-frauds/article68954842.ece