The Reserve Bank Of India (RBI) has announced a FREE AI framework to promote ethical and responsible AI use in the finance sector. Alongside this, it has also introduced MuleHunter, an AI tool that is designed to detect mule accounts and reduce digital frauds that are happening.
As reported by the Press release on December 6, 2024, the Reserve Bank has been taking various measures to coordinate with banks and other stakeholders to prevent and reduce digital fraud in the financial sector. These include RBI guidelines to regulated entities for strengthening cybersecurity, cyber fraud prevention, and transaction monitoring. The use of money mule accounts is a common method universally accepted by scammers to channel the proceeds.
The RBI guideline further directs that all the banks are encouraged to collaborate with RBIH for further development of the MuleHunter. The AI initiative is to deal with the issue of mule bank accounts being used for executive financial fraud.
Sheetal R Bhardwaj, the executive member of the Association of Certified Financial Crime Specialists (ACFCS) said, “A money mule fraud involves using someone’s bank account to transfer or move illegally acquired money on behalf of others”.
She further added that the MuleHunter AI model which is developed by the Reserve Bank Innovation Hub (RBIH) uses advanced artificial intelligence and machine learning to detect and curb the use of mule accounts. It will analyze user behavior and identify irregularities in account activities, this model will also proactively detect potential mule accounts before they are used for illegal transactions.
Deputy Governor Rabi Sankar also commented that, “ any payment system operator, any bank, any credit card network, every entity is free to use their own fraud detection systems.”
This will help banks and financial institutions to shut down suspicious accounts promptly and will thereby be preventing the flow of unlawful funds.
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