Hyderabad City Police Commissioner Sri VC Sajjanar, IPS has called for critical reforms in the banking system to dismantle organized cybercrime syndicates operating across the country. In a detailed letter addressed to the Governor of the Reserve Bank of India, Sri Sanjay Malhotra, on Tuesday, the Commissioner outlined how systemic vulnerabilities in the banking sector are enabling widespread cyber fraud through the creation of mule accounts under the names of innocent individuals.
The concerns raised by the Commissioner stem from findings during Operation Octopus, a high-profile investigation conducted by the city police. The operation exposed serious gaps in KYC verification processes at the branch level and revealed how these accounts have become the backbone of cybercriminal operations. The investigation uncovered instances of gross negligence and deliberate collusion between bank employees and fraudsters.
The letter to the RBI urged the central bank to issue stringent directives to all commercial banks to fix accountability on branch-level officials. Sri VC Sajjanar, IPS recommended an immediate systemic audit to ensure proper implementation of KYC guidelines at the field level. He emphasized that current enforcement mechanisms are inadequate to prevent the creation of fraudulent accounts that facilitate money laundering and cyber fraud.
The Commissioner cited a specific case at the Nasik branch of IDFC First Bank in Maharashtra where a KYC verifier illegally accessed a colleague’s credentials to create mule accounts in exchange for commissions. He expressed deep concern over such instances where bank employees themselves have colluded with cybercriminals. The letter noted that such irregularities are predominantly seen in private banks and stressed the need to address these structural flaws urgently.
To strengthen accountability, the Commissioner proposed that any bank official arrested or chargesheeted for aiding cybercrime should be reported to the RBI for permanent blacklisting. This measure aims to create a deterrent against employee involvement in cyber fraud. The letter also called for the formation of a Joint Working Group involving representatives from the RBI, banking institutions, and the Police to regularly review the issue of mule accounts and coordinate prevention strategies.
The Commissioner stressed the importance of banks adopting advanced technology to detect suspicious transactions in real-time. He recommended that financial institutions implement robust monitoring systems capable of flagging unusual patterns of account activity. Such technological interventions could help identify mule accounts before they are used for criminal purposes and prevent the flow of fraudulent funds through the banking system.
Sri VC Sajjanar, IPS also issued a public advisory warning citizens against fraudulent advertisements on social media platforms like WhatsApp and Telegram promising high returns. He clarified that no law enforcement agency conducts interrogations via video calls or demands money under the pretext of digital arrests. The Commissioner warned against the illegal practice of renting out bank accounts for commissions, noting that account holders would be held legally responsible for any crimes committed through their accounts.
The Commissioner urged victims of cyber fraud to report incidents within the golden hour by calling the toll-free number 1930 or visiting the portal cybercrime.gov.in. Prompt reporting significantly increases the chances of freezing fraudulent transactions and recovering stolen funds. The initiative reflects the Hyderabad Police’s comprehensive approach to combating cybercrime through both systemic reforms and public awareness.
