In one of India’s largest crackdowns against cyber-enabled financial crime, the Central Bureau of Investigation (CBI) has launched simultaneous raids at 42 locations across five states, unearthing a staggering network of over 8.5 lakh mule bank accounts operating across more than 700 bank branches nationwide.
The raids, conducted under the ongoing Operation Chakra-V, signal the CBI’s escalating offensive against organized cybercrime syndicates that have leveraged India’s banking infrastructure to launder billions of rupees obtained through scams ranging from digital arrests and investment frauds to UPI-based frauds and impersonation rackets.
Mule Accounts: The Invisible Backbone of Cybercrime
Mule accounts—bank accounts opened in the names of either unwitting individuals or paid accomplices, have emerged as a critical cog in cybercriminal operations. These accounts serve as conduits to receive, layer, and disburse illicit funds swiftly, obscuring money trails and frustrating law enforcement efforts.
According to preliminary findings, many of these 8.5 lakh accounts were opened without proper KYC documentation, often relying on forged identity proofs and manipulated addresses. Investigators say intermediaries and middlemen aggressively recruited account holders, sometimes paying individuals nominal sums to lend their identities for the fraudulent accounts.
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Inside the Collusion: Bank Staff, Agents, and Middlemen
CBI’s FIR has implicated not only private individuals but also bank correspondents, aggregators, and certain bank staff who either turned a blind eye or actively facilitated the scam. Some bank branches, the agency alleges, failed to conduct initial or enhanced due diligence, ignored suspicious transaction alerts, and deliberately skipped sending acknowledgment letters required to verify residential addresses, key steps in preventing identity fraud.
So far, nine individuals, including bank agents and intermediaries, have been arrested. Investigators seized a trove of evidence, including mobile phones, bank account opening forms, suspicious KYC documents, and transaction records. Several more individuals are under the scanner as the probe deepens.
Regulatory Tremors: RBI May Tighten the Screws
The exposure of such a massive network of fraudulent accounts has sent ripples through India’s financial sector. Industry insiders anticipate fresh compliance directives from the Reserve Bank of India (RBI), particularly to tighten KYC protocols and enforce stricter monitoring of third-party banking agents.
Beyond regulatory implications, the raids underscore growing challenges facing India’s digital economy as cybercriminals become more sophisticated, exploiting systemic vulnerabilities and the rapid adoption of digital payments.
CBI officials emphasize that Operation Chakra-V will continue to pursue not only individual perpetrators but also institutional weaknesses enabling such crimes.
About the author – Prakriti Jha is a student at National Forensic Sciences University, Gandhinagar, currently pursuing B.Sc. LL.B (Hons.) with a keen interest in the intersection of law and data science. She is passionate about exploring how legal frameworks adapt to the evolving challenges of technology and justice.