New Delhi, Dec 6 (PTI) Finance Ministry on Friday asked banks and financial institutions to use artificial intelligence tools including MuleHunterAI developed by the Reserve Bank to rein in growing financial frauds.
In a meeting chaired by Financial Services Secretary M Nagaraju, banks were asked to adopt best practices, leveraging cutting edge tools, and foster inter-bank collaboration to address mule accounts effectively.
He emphasised that proactive measures are required to be taken to protect citizens’ hard-earned money.
“Protecting citizens’ wealth is our shared responsibility,” the Department of Financial Services (DFS) said in a series of posts on X.
Banks are directed to adopt advanced technologies including artificial intelligence and machine learning solutions for real-time detection of mule accounts, it said.
“Banks were also encouraged to explore and implement http://MuleHunter.AI, an AI/ML-driven model developed by RBI, to strengthen the detection and monitoring of mule accounts,” he told representatives of I4C, RBI, NABARD and banks.
Earlier in the day, the RBI asked banks to collaborate with its initiative MuleHunter.AI to weed out mule accounts which are used to commit financial fraud.
A mule account is a bank account used by criminals to launder illicit funds, often set up by unsuspecting individuals lured by promises of easy money or coerced into participation. The transfer of funds through these highly interconnected accounts makes it difficult to trace and recover the funds.
“Use of money mule accounts is a common method adopted by fraudsters to channel proceeds of frauds,” Reserve Bank of India (RBI) Governor Shaktikanta Das said.
Unveiling the December 2024 monetary policy, he said the RBI is currently running a hackathon on the theme ‘Zero Financial Frauds’ which includes a specific problem statement on mule accounts to encourage development of innovative solutions to contain the use of mule accounts.
Another initiative in this direction is the AI/ ML-based model called MuleHunter.AI, piloted by Reserve Bank Innovation Hub (RBIH), a subsidiary of Reserve Bank.
This model enables detection of mule bank accounts in an efficient manner. A pilot with two large public sector banks has yielded encouraging results.
DFS Secretary emphasized the need for regulators and banks to work collectively in curbing digital financial frauds, it said, adding, sharing of good practices across the banking sector was highlighted to ensure a unified and effective response.
