The Reserve Bank of India (RBI) is preparing to make artificial intelligence (AI)-based verification of bank accounts mandatory across all banks, sources confirmed. The move is aimed at curbing the growing menace of online fraud and dismantling networks of mule accounts used by cybercriminals.
According to officials, the AI-driven system will become a compulsory requirement not just for routine banking operations but also as a condition for granting new licences and renewing existing ones. This regulatory push marks one of the most comprehensive attempts yet to integrate technology into fraud detection and prevention mechanisms in the banking sector.
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Pilot Project Uncovers Millions of Mule Accounts
A pilot project conducted with one bank has already showcased the potential of AI in tackling fraud. The system identified nearly 1.3 million mule accounts, revealing the scale of the challenge and the effectiveness of automated monitoring.
Mule accounts, often opened using forged documents or in the names of unsuspecting individuals, are commonly exploited to route illegal funds obtained through scams. Detecting and blocking these accounts in real time has long been a challenge for banks, and authorities believe AI can provide the breakthrough needed to address this gap.
An official stated that AI systems can analyze transaction patterns and anomalies far faster than human oversight, making them critical tools in fighting financial crime.
Nationwide Awareness Campaign to Follow
In addition to regulatory measures, the RBI and other authorities are planning to launch a nationwide public awareness campaign. The goal is to educate citizens about the risks of mule accounts, how fraudsters misuse them, and the importance of verifying personal information before sharing bank details.
The initiative is expected to significantly reduce incidents of cyber-enabled financial fraud, improve trust in the banking system, and protect consumers from rising threats. Detailed RBI guidelines are expected to be issued in the coming weeks, with banks given a timeline to implement the system.
Experts suggest that India’s adoption of AI-based verification could serve as a model for other nations facing similar challenges with digital banking fraud.
