BENGALURU: Banks across Karnataka have begun responding more quickly to cybercrime investigators, a shift police say has helped move stalled cases forward. But unresolved technical gaps, widespread mule accounts and the absence of a finalised national procedure for defreezing accounts continue to leave victims caught in bureaucratic loops.
Faster Replies, After Years of Delays
For years, cybercrime investigators in Karnataka complained that crucial leads were slipping away while they waited for banks to respond to formal requests. According to data accessed by The Hindu, banks took an average of 15 to 20 days in 2024 to reply to police queries and notices, depending on the institution. By 2025, that window has narrowed to about a week.
Some banks have moved even faster. Pranab Mohanty, Director General of Police for the Cyber Command Unit, said a few institutions have reduced their average response time to three days, giving investigators what he described as a sharper edge in progressing cases.
Response time, police officials note, is not an abstract metric. It refers to how quickly banks provide account details, statements and transaction records linked to suspected cybercrimes—information that often forms the primary trail in digital fraud cases.
Why Time Matters in Cybercrime Investigations
Unlike conventional crimes, investigators say, cybercrime cases rarely hinge on eyewitnesses or physical evidence. “Bank transactions and other banking-related aspects are the primary leads,” Mr. Mohanty explained. When information arrives late, investigations stall and the likelihood of tracing money flows diminishes.
Police attribute the recent improvement to sustained engagement with bank authorities. Frequent meetings have led to the appointment of liaison and nodal officers, allowing investigators to flag delays directly instead of navigating multiple layers of formal correspondence. Senior officers say this has reduced time lost to procedural back-and-forth.
The issue has also reached regulators. The Criminal Investigation Department has previously held joint meetings with the Reserve Bank of India and representatives of commercial banks, highlighting how prolonged response times were hampering investigations.
Recovery Rates Remain Low, Mule Accounts Loom Large
Despite quicker replies, outcomes on the ground remain sobering. The money recovery rate in cybercrime cases in the State fell below 10 percent in 2025, according to senior investigators. Faster responses, one officer said, are only a first step.
A central problem is the proliferation of mule accounts—bank accounts opened or used to move illicit funds. Police say banks must tighten know-your-customer checks at the account-opening stage. Lenient verification, they argue, has created loopholes that allow mule accounts to flourish, forming the backbone of many financial cybercrimes.
In 2024 alone, more than 70,000 mule bank accounts were identified as being used in Karnataka. Investigators caution that this figure reflects only the first layer of such accounts, with complex chains often extending further.
Equally troubling, officers say, is lax monitoring of suspicious transactions. A more robust system could flag irregular patterns earlier and improve the chances of intercepting siphoned funds before they disperse.
Lien Marks, Frozen Accounts and an Unfinished SOP
While police and banks focus on tracking fraudsters, ordinary account holders are increasingly caught in the net. Over the past two years, there has been a rise in innocent individuals’ accounts being frozen due to erroneous or even mischievous reporting of cybercrime activity. When affected customers approach banks, they are often directed to the police; in some cases, no first information report exists, compounding the confusion.
Police say the fallout has been significant. Small businesses have faced disruptions and losses, and there have been instances where school accounts were blocked.
In a particularly fraught scenario, victims who recover stolen money after investigations may find their own accounts frozen. Once funds are traced back from a mule account—often linked to multiple cases—the victim’s account may be flagged as the last mule in the chain, forcing them to undergo the process again.
The Ministry of Home Affairs has drafted a standard operating procedure to address such situations, including the defreezing of lien-marked accounts. But officials say the SOP is yet to be finalised, leaving victims navigating an uneven system even as investigative response times improve.
