After a sustained crackdown on digital arrest, trading and investment scams, Hyderabad Police have flagged deep weaknesses in the banking system and called for urgent reforms, as authorities moved to build a nationwide response to mule accounts that investigators say sit at the centre of digital financial fraud.
High Level Meeting Focuses on Mule Accounts
More than 9,437 cyber fraud cases have been reported in the city, with 156 arrests and losses nearing Rs 400 crore annually. Against that backdrop, the Department of Financial Services secretary chaired a high level meeting on Thursday to use the findings of the police crackdown for a coordinated national action against mule accounts and related financial fraud.
The meeting was attended by Hyderabad Police Commissioner V C Sajjanar and senior officials from the Reserve Bank of India, the Central Bureau of Investigation, the Indian Cyber Crime Coordination Centre, banks and other agencies. Mule accounts were found to be central to every case examined.
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Banks Told to Improve Coordination and Response
The meeting stressed the need for real time intelligence sharing, faster response systems and closer coordination between banks and law enforcement agencies. It also directed banks to adopt RBI’s MuleHunter.AI tool at the earliest.
The police investigations have highlighted systemic gaps in the banking framework, with enforcement officials pushing for reforms that would allow suspicious account activity to be detected and acted upon much more quickly.
Operation Octopus Findings Shape Reform Push
The Hyderabad Police investigations under Operation Octopus found that mule accounts allowed fraudsters to rapidly layer stolen money and disperse it across multiple accounts within hours, making recovery increasingly difficult once the initial transfer had taken place.
Commissioner Sajjanar has written five letters to RBI Governor Sanjay Malhotra over the past four months, with the most recent sent on April 25. The latest meeting appears to mark an effort to convert those warnings and investigative findings into a broader institutional response aimed at strengthening the banking system’s defences against organised digital fraud.
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.
