New Delhi:

The RBI on Friday asked banks to use only the ‘1600xx’ phone numbering series to call customers for transactional purposes with a view to preventing financial fraud.

It further said that for promotional purposes, banks and other regulated entities (REs) should use only the ‘140xx’ numbering series for the prevention of financial frauds perpetrated using voice calls and SMS.

Banks and other regulated entities (REs) have also been asked to monitor and clean their customer database.

The proliferation of digital transactions, while offering convenience and efficiency, has also led to a surge in frauds, a pressing concern underscoring the need for concerted action, said a Reserve Bank circular to REs.

The mobile number of a customer has emerged as a ubiquitous identifier, instrumental in the account authentication and verification process, receiving sensitive payment communication, such as OTPs, transaction alerts, and account updates.

“The mobile number, however, can also be misused by scamsters in multiple ways for committing various types of online and other frauds,” the circular said on ‘Prevention of financial frauds perpetrated using voice calls and SMS – Regulatory prescriptions and Institutional Safeguards’.

“Undertake transactional / service calls only using ‘1600xx’ numbering series, when operationalised; undertake promotional voice calls only through phone numbers using ‘140xx’ numbering series; follow the ‘Important Guidelines for sending commercial communication using telecom resources through Voice Calls or SMS’ issued by Telecom Regulatory Authority of India (TRAI),” it said.

The RBI asked the REs to utilise the Mobile Number Revocation List (MNRL) available on the Digital Intelligence Platform (DIP) developed by the Department of Telecommunications (DoT) and the Ministry of Communications to monitor and clean their customer database.

To enhance fraud risk monitoring and prevention, the REs have been asked to develop Standard Operating Procedures (SOP) incorporating the required action to be taken.

The required action to be taken includes updating the registered mobile number(RMN) after due verification, and enhanced monitoring of accounts linked to these revoked mobile numbers to prevent the linked accounts from being operated as Money Mules and/or being involved in cyber frauds, the circular said.

The Reserve Bank has asked all the REs to ensure compliance with the instructions expeditiously, in any case, not later than March 31, 2025.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The Reserve Bank Innovation Hub (RBIH), which is the innovation arm of the Reserve Bank of India (RBI), is making giant strides in the fight against financial fraud through the promotion of the use of an advanced AI tool called MuleHunter.AI. This technology identifies and flags mule accounts, commonly used in money laundering schemes.

The application of MuleHunter.AI has already been successfully demonstrated in two public sector banks. Data from the National Crime Records Bureau (NCRB) indicate that online financial frauds are responsible for 67.8% of all complaints related to cybercrime. This makes the effective provision of fraud prevention AI tools highly urgent.

One of the biggest problems in fighting financial fraud is the exploitation of money mule accounts. These accounts are a key enabler of illicit financial activities; hence, tools like MuleHunter.AI is of paramount importance to protect the financial ecosystem and curb cybercrime.

What is a money mule account?

According to RBIH, 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.

The Development of MuleHunter.AI

According to the Reserve Bank Innovation Hub, the department has conducted extensive consultations with banks to understand the existing methods and processes employed to identify and report these money mule accounts. The static rule-based systems used to detect mule accounts result in high false positives and longer turnaround times, causing many such accounts to remain undetected.

After working with several banks to analyse nineteen different patterns of mule account activity, the platform was created. Mulehunter.Ai’s initial results demonstrate notable gains in efficiency and accuracy.

How Mulehunter.Ai works

This in-house AI/ML-based solution is better suited than a rule-based system to identify suspected mule accounts. Advanced ML algorithms can analyse transaction and account detail-related datasets to predict mule accounts with higher accuracy and greater speed than typical rule-based systems.

The purpose of RBIH’s AI platform is to speed up the identification of fraudulent accounts. Frauds can happen through a variety of channels, and they are no longer little incidents; they are becoming big day by day. The best approach would be to look at where the money eventually goes-to mule accounts. This machine learning-based approach has enabled the detection of more mule accounts within a bank’s system.

New Delhi:

Identity theft and loan fraud have become a major concern in today’s world with Anupam Gupta, a financial influencer, being the latest victim. His name and address were used to take a loan without his knowledge and he was being “chased by Mobikwik agents” to repay this loan, he said.

Though Mobikwik has halted the loan calls for now and is trying to resolve this, the fact that a finfluencer, who is also a chartered accountant, could fall victim to such a fraud shows the grim reality of identity theft.

Sharing screenshots of his CIBIL (which maintains credit files in India) enquiry on X, Mr Gupta said a Rs 30,000 personal loan was taken from Lendbox, an online peer lending platform, using his name and contact details.

From 28th April onwards, the calls and WhatsApp pings started. @MobiKwik collection agents said repay the loan. I said I have taken no loan. When I asked for details, here is the ledger they sent me. pic.twitter.com/z9c5uPEnn5

— Anupam Gupta (@b50) June 1, 2024

“From 28th April onwards, the calls and WhatsApp pings started. @MobiKwik collection agents said repay the loan. I said I have taken no loan. When I asked for details, here is the ledger they sent me,” said Mr Gupta, who runs the investing podcast ‘Paisa Vaisa’.

He said the agents refused to listen to him and provided him with a UPI number that had received the loan amount. But it did not belong to him, said Mr Gupta and filed a police complaint.

He said he had received a CIBIL notification a month earlier about a loan being taken using his account, which he had ignored.

“Folks, please be careful. My mistake was that when I got the CIBIL notification, I did not pay attention. I should have flagged it off then and there. But I didn’t. And now I have to face these calls,” he said.

Responding to him online, Mobikwik said all follow-up calls and process-related adjustments regarding the loan have been halted and they are trying to resolve the matter. 

Mr Gupta isn’t the only person who has been a victim of such a loan fraud.

Piyush Sinha, another chartered accountant, had a loan default reported by Mobikwik in April though he had not taken any such loan. Raising the issue with Lendbox, from where the loan was taken, did not help and they asserted the loan was taken by Mobikwik, he said.