Module: General Practice
Q22: Consider the following statements regarding the detection of mule accounts:
Statement 1: A "mule account" is a bank account used by third parties to receive and transfer illegally acquired funds, acting as a crucial link in the money laundering chain.
Statement 2: The RBI recently highlighted the success of the "MuleHunter.AI" system, which uses artificial intelligence to proactively identify and freeze these suspicious accounts across the banking sector.
Statement 3: The AI model relies on analyzing rapid, high-frequency transactions, specifically targeting accounts where more than 90% of incoming funds are transferred out within 1 hour.
Statement 4: Under the new protocols, banks are mandated to report their AI-flagged mule account statistics to the RBI's Fraud Monitoring Return (FMR) portal within a strict window of 7 days of freezing.
Which of the above statements is/are correct?
Statement 2: The RBI recently highlighted the success of the "MuleHunter.AI" system, which uses artificial intelligence to proactively identify and freeze these suspicious accounts across the banking sector.
Statement 3: The AI model relies on analyzing rapid, high-frequency transactions, specifically targeting accounts where more than 90% of incoming funds are transferred out within 1 hour.
Statement 4: Under the new protocols, banks are mandated to report their AI-flagged mule account statistics to the RBI's Fraud Monitoring Return (FMR) portal within a strict window of 7 days of freezing.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
All statements are correct. (Option D)They buy or rent accounts from vulnerable individuals (students, laborers) to receive stolen money.
These are "mule accounts." Structural Breakdown: Catching mules manually is impossible due to the sheer volume of UPI transactions.
AI is required to detect unnatural patterns—like an account that sat dormant for a year suddenly receiving ₹50,000 and forwarding it to five different crypto-exchanges in 10 minutes.
Historical / Static Context: The Prevention of Money Laundering Act (PMLA) and RBI's KYC Master Directions hold banks liable if their infrastructure is used for money laundering.
The Dynamic Update (NEW) & Data: The RBI qualitatively endorsed the deployment of the "MuleHunter.AI" system as a defensive weapon (Statement 2). The hard data parameters that the AI uses to trigger a freeze include the "velocity of funds" metric, specifically flagging when 90% of funds leave within 1 hour (Statement 3). The compliance data mandates that banks must report these blocked accounts to the RBI within 7 days (Statement 4).