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New Delhi: The Reserve Bank of India (RBI) on Friday said it has developed an artificial intelligence-based innovative model called ‘MuleHunter.AI’ to detect and prevent digital financial frauds.
Developed by Reserve Bank Innovation Hub (RBIH), Bengaluru, the new solution will help banks in dealing with “issue of mule bank accounts expeditiously and reduce digital frauds,” RBI Governor Shaktikanta Das said.
A mule account refers to a bank account that is used by criminals to launder illicit funds. Such accounts are often set up by individuals who are either unknowingly recruited through promises of easy money or coerced into participating in illegal activities.
While high valued transactions are routinely screened as per the Prevention of Money Laundering Act (PMLA), mule accounts are very difficult to track.
“As part of the Reserve Bank’s continued efforts to prevent and mitigate digital frauds, an innovative AI / ML (artificial intelligence and machine learning) based model, namely, MuleHunter.AI has been developed by the Reserve Bank Innovation Hub (RBIH), Bengaluru. This will help the banks to deal with the issue of mule bank accounts expeditiously and reduce digital frauds,” said Das while unveiling the monetary policy.
Das said the RBI has taken various measures in coordination with banks and other stakeholders to prevent and mitigate digital fraud in the financial sector. “Banks are encouraged to collaborate with RBIH to further develop the MuleHunter.AI initiative to deal with the issue of mule bank accounts being used for committing financial frauds," the Governor said.
Das informed that the RBI is currently running a hackathon on the theme “Zero Financial Frauds” which aims to encourage development of innovative solutions to contain the menace of mule accounts.
“We welcome the introduction of Mulehunter.AI, which will enable the banking sector to address the issue of mule accounts efficiently, ensuring greater security and trust in the digital ecosystem,” said Ajay Kumar Srivastava, Managing Director and CEO, Indian Overseas Bank.
The RBI has constituted a committee to develop a Framework for Responsible and Ethical Enablement of AI. The objective is to provide firms providing financial products and services with a set of foundational principles to consider when using AI in decision-making and promote public confidence and trust in the use of AI.
“The use of technology to detect mule accounts is significant for banks as mule accounts are sophisticated mechanisms to misuse banking channels for money laundering,” said Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.