NEW DELHI, August 5 — The Supreme Court of India directed the Reserve Bank of India (RBI) on Wednesday to formulate a Standard Operating Procedure (SOP) for commercial banks to identify and block "mule accounts" used in cyber fraud.
A bench reviewing digital crime petitions observed that bank accounts opened using stolen or fake identities are increasingly used by cybercriminals to transfer and withdraw stolen money. The court directed the RBI to coordinate with the Ministry of Home Affairs to establish rules for quick account freezes and coordination with local police.
The central bank announced it will draft guidelines to tighten Know Your Customer (KYC) norms for online bank accounts and monitor large, unusual transfer patterns.
Banking regulations and judicial orders on digital security are important general awareness topics. Candidates should know that the RBI is the primary regulator of the banking sector in India, governed by the Reserve Bank of India Act, 1934.