A recent test of the facial recognition system at a major bank in Karnataka revealed that one person had 56 accounts under different identities, both male and female, a senior cybercrime official said.
With cyber crimes increasing exponentially in recent years, both in numbers and scale, the Karnataka Police has identified bank accounts as a key point to contain the threat and is working with several banks to tackle the issue.
“The police department is in constant touch with the Reserve Bank of India (RBI) and all other banking and financial institutions to get information about bank accounts involved in cyber crime, and action is being taken,” Karnataka Home Minister G Paramesh told the state legislature. this week.
The RBI recently issued an advertisement in newspapers warning the public not to facilitate the creation of “mule accounts” in their names.
“The entire gamut of cyber crime runs through the country’s white money economy. Mechanisms introduced for financial inclusion like bank accounts and net banking are being misused for cyber crime. This includes theft of white money through regular banking channels and anonymous networks,” the cyber crime official said.
According to senior police officials involved in tackling cybercrime in Karnataka, the amount lost in such incidents in Karnataka in 2024 was around Rs 2,600 crore – three times the Rs 700 crore lost in 2023.
“Almost 50 percent of the lost investment is due to fraud. FedEx scam or digital arrest type cases involve losses in the range of Rs 200 crore,” said a senior police officer.
The data presented by the Home Minister to the Legislature on December 18 showed that 20,875 cyber crime cases were registered in the state in 2024 (up to November 30), while 22,094 cases were registered in 2023 and 12,879 cases in 2022. 2024 is still under investigation.
In Bengaluru, the IT capital of India, the number of cyber crimes increased from 9,938 cases in 2022 to 17,632 cases in 2023 and 16,357 cases in 2024 (as of November 30), according to official data from the city police.
However, the amount people will lose in 2024 has increased sixfold compared to 2022 and tripled compared to 2023. In the last five years, the amount lost by common people in cyber crime has increased by 25 times. As per Bangalore data.
In 2024, the amount lost to cyber crime in Bangalore (as of November 30) is Rs 1,806 crore compared to Rs 673 crore in 2023 and Rs 271 crore in 2022. The amount lost to cyber crime in 2019 was Rs 70 crore. .
According to Bengaluru data, out of 16,357 cybercrime cases in 2024, 5,707 were investment frauds, compared to 3,754 cases in 2023 and 411 cases in 2022. The number of FedEx or digital arrest frauds has increased from zero in 2022 to 4022 now. 1,417 in 2024 (up to November 30). Fraud linked to loan apps decreased from 473 in 2023 to 252 in 2024.
“One of the primary measures to control cyber crime is through regulation of bank accounts. We are trying to help banks in this regard. Currently different banks have different KYC standards for account opening which leaves many loopholes for exploitation,” said a senior cyber who works with banks in Karnataka. The crime officer said.
New methods of opening bank accounts — which do not require customers to be physically present at banks — have allowed the proliferation of mule accounts, police said.
“In the eKYC system, the bank does not verify the credentials of the person opening the new account but the verification is outsourced to third parties which may be compromised,” said the cybercrime official. Banks allowing people other than those who clear KYC norms to operate accounts is also a major factor.
“Some top banks have largely managed to weed out fake accounts and have automated systems in place to alert when accounts are suspected of being used for fraud. Smaller banks still have a lot of ground to cover. Cooperative banks are most susceptible to facilitating mule accounts,” the official said.
While banks deny liability for theft of funds through their accounts, most victims of cybercrime are left high and dry when they are robbed by cybercriminals who often use the same set of bank accounts to defraud multiple people.
Hundreds of victims in Bengaluru have seen their hope of getting their money back lost as the banks – into whose accounts the stolen funds were initially transferred – argued in the Karnataka High Court that there were no funds in the frozen accounts and that the same accounts were used. In several offences, resulting in claims from across India.
Axis Bank alone filed more than 200 petitions in the Karnataka High Court in 2024 challenging the lower court’s order to return money lost to victims of cyber fraud.
“We are seeing current accounts being opened in the names of random people without proper verification. Current accounts are for businesses. There are hundreds of crores of suspicious transactions but the authorities are not informed,” Bengaluru police commissioner B Dayanand said recently while calling for more accountability from banks to curb cyber fraud.
“The key to controlling cyber fraud is through a system of checks on bank accounts opened for fraud,” said Director General of Police Pranab Mohanty, head of the Cyber Crime Wing of the Criminal Investigation Department of the Karnataka Police.
Another major aspect that the police is facing is the proliferation of fake identities in the form of PAN and Aadhaar numbers which are used to open bank accounts.
“Cyber criminals know which banks’ systems are weak. We are trying to come up with a system that will allow banks to stop cyber crime and recover stolen funds,” said a cyber crime official.
Incidents of cybercrime
Funds lost to cyber crime (in crores of rupees)
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