Seven bank officials have been arrested in Hyderabad for allegedly conspiring with cybercriminals to open mule accounts, as investigators said insiders at multiple banks bypassed mandatory checks and helped fraud networks move large sums of money.
Bank Staff Held in Mule Account Cases
The arrests were made on Thursday in connection with five cases in Hyderabad. Cyberabad police said the action was part of Operation Crackdown, during which investigators found bank employees allegedly working with fraudsters and account suppliers.
The officials are accused of opening current accounts by bypassing mandatory verification procedures and accepting commissions in return. DCP Cybercrime T Sai Maohar as says that such insiders made it easier for cybercriminals to move large amounts of money and that, without their support, such frauds would have been much harder to carry out.
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Police Say KYC and Verification Rules Were Ignored
The accused include employees of Indian Bank, Bank of Maharashtra, Bandhan Bank and IndusInd Bank. Police said the officials ignored KYC rules and failed to properly verify customer details before opening accounts.
In some instances, the material says, field checks were carried out only after illegal payments had been received. Investigators also found that the accounts handled unusually high value transactions. Despite those warning signs, the officials allegedly neither reported suspicious activity nor took action.
Wider Crackdown Exposes Larger Banking Link
The reports also refer to a separate Hyderabad police operation last week under Operation Octopus 2.0, in which a large cyber fraud network was busted and 52 suspects were arrested across nine states, including 32 bank employees.
Those arrested in that operation included managers, clerks and KYC staff from banks such as Bank of Baroda, Bandhan Bank and IndusInd Bank. Taken together, the two operations point to a broader pattern in which bank insiders are alleged to have enabled cybercrime networks by weakening verification safeguards and facilitating the creation and use of accounts for fraudulent transactions.
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.
