The Central Bureau of Investigation (CBI) has registered a high-profile FIR against a branch head of Punjab & Sind Bank and 18 other individuals for allegedly orchestrating a systematic money-laundering operation that routed over Rs 1,000 crore through mule accounts using forged documents and fabricated identities. The probe follows a preliminary investigation that exposed a widespread scheme to conceal and move proceeds of cybercrime and other illicit activities.
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How the Scheme Unfolded
According to CBI officials, the agency uncovered a network of 13 current accounts that were opened at the Government Girls Senior Secondary School Branch of Punjab & Sind Bank in Sri Ganganagar, Rajasthan. These accounts were allegedly created in the names of non-existent firms, using forged KYC documents, fake rent agreements, and other fabricated supporting documents.
The accounts were then used to layer and transfer illicit funds generated from cybercrime and other unlawful activities through multiple banking channels and digital platforms. The agency’s FIR states that these transactions involved amounts totaling about Rs 1,084 crore.
A “mule account” is usually a bank account opened using falsified identification details and often used to move or launder money on behalf of criminal syndicates, sometimes without the knowledge of the individuals whose names are used.
Allegations Against the Accused
The FIR names the branch head, identified as Vikas Wadhwa, along with 18 others, for their alleged roles in violating Know Your Customer (KYC) norms, failing to exercise due diligence, and breaching standard operating procedures. The CBI has alleged that fake site visit reports and business verification documents were produced by bank personnel to justify account openings in the names of fictitious firms.
In its official complaint, the agency asserted:
“The said accounts were allegedly opened with the connivance and criminal conspiracy of unknown bank officials, violating KYC norms, due diligence requirements and standard operating procedures.”
The CBI further noted that the accused likely gained illicit financial benefits from the scheme, while the bank itself suffered “wrongful reputational loss” and was potentially exposed to penalties under regulatory law.
Legal Context and Implications
Under Indian law, banks are obligated to comply with stringent anti-money-laundering (AML) requirements and KYC norms designed to prevent financial systems from being exploited by fraudsters and criminal syndicates. The alleged violations in this case — including the use of forged documents, identity manipulation, and corporate shell firms — signal a deeply flawed compliance culture at the Sri Ganganagar branch.
If the allegations of money laundering are confirmed, the accused could face charges under the Prevention of Money Laundering Act (PMLA) and sections of the Indian Penal Code related to fraud and criminal conspiracy. Additionally, banks found negligent in enforcing AML measures can be subject to penalties by the Reserve Bank of India (RBI). Analysts say this case could trigger tighter regulatory oversight of banking compliance frameworks across the industry.
Broader Money Laundering Trends
This development comes against the backdrop of a growing number of cases involving misuse of bank accounts for laundering proceeds of digital and cybercrime. Recent investigations by law enforcement have highlighted how cybercriminals increasingly rely on mule networks — including domestic bank accounts, shell companies, and fabricated identities — to obfuscate transaction trails and avoid detection by regulators.
Experts warn that such tactics not only facilitate money laundering but also pose significant risks to the integrity of the financial system and national security interests. Effective enforcement of KYC and AML norms, they argue, remains critical to deterring criminal exploitation of banking infrastructure.
Next Steps in the Investigation
The CBI is continuing its investigation, which could lead to additional arrests or charges as more evidence comes to light. For now, the FIR marks one of the most significant probes into banking sector compliance failures and money laundering linked to cybercrime in recent years.
As the case unfolds, it may provide deeper insights into how illicit funds travel through complex networks and the safeguards needed to protect India’s financial ecosystem from criminal exploitation.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
