Mule accounts frauds: RBI encourages a larger population to use banking services and avail digital payments; Foster Collaboration Between Regulators, Banks, Tech Providers
FinTech BizNews Service
Mumbai, 6 December, 2024: Shaktikanta Das, Governor, the Reserve Bank of India, spoke today following MPC meeting. Decisions and Deliberations of the Monetary Policy Committee (MPC) have bearing upon various aspects of lending, investment, saving, digital & IT, Banking liquidity, FPIs inflows etc. Let’s know what are the views of the leading IT service providers and Tech players.
RBI in today’s RBI Monetary Policy Committee meeting announcement addressed the critical issue of mule accounts related frauds, highlighting MuleHunter.ai, an AI solution to identify mule bank accounts.
Jaya Vaidhyanathan, CEO, BCT Digital: At BCT Digital, we have devised a solution, which leverages real-time monitoring to alert banks about money mules and avert frauds. It utilizes machine learning to predict and prevent fraud, providing early warning signals to banks by identifying suspicious accounts and alerting them in real time. This proactive approach strengthens the financial system by disrupting fraudulent networks and reducing the reliance on reactive measures.
As the fight against mule accounts intensifies, it is crucial to foster collaboration between regulators, banks, and technology providers. The RBI’s continued focus on initiatives like the ‘Zero Financial Frauds’ hackathon and MuleHunter.AI underscores the importance of building a robust, technology-driven framework to safeguard India’s financial ecosystem."
Rahul Jain, CFO, NTT DATA Payment Services India: “Allowing Small Finance Banks (SFB) to offer pre-sanctioned loans through the UPI should ensure that the customer at the ‘bottom of the pyramid’ gets better access to credit in a cost-efficient manner. SFBs can leverage their high-tech and low-cost model using this UPI based lending to offer small sized loans to achieve incremental growth.
Forming a committee to develop Framework for Responsible and Ethical Enablement of AI (FREE-AI) in the financial sector should address the rising concerns around the use of modern technologies. It should not only address risks associated with the banking operations and business continuity at bank level, but also cater to consumer centric issues such as data privacy and fraud protection. This committee should offer a framework that creates a tech-driven sustainable growth environment for the Indian financial sector.
RBI has advised banks to segregate the accounts of beneficiaries of various Central or State Government schemes through direct benefit transfer (DBT) and facilitate uninterrupted credit and utilisation of DBT amounts. Recent demand for allowing the use of non-financial transaction such as checking account balance, for making inoperative bank accounts functional, if allowed, can be another big step in strengthening the position of JAM (Jandhan bank account, Aadhar and Mobile) as the cornerstone of India growth story. This should encourage a larger population to use banking services and avail digital payments.
Amit Sachdev, COO, M1xchange: “The RBI’s move to establish the Framework for Responsible and Ethical Enablement of AI (FREE-AI) is a step forward in enabling innovation and inclusivity in the financial sector within defined boundaries. AI-driven underwriting models can transform credit assessments, enhance efficacy and efficiency, reduce NPAs, and improve the viability of catering to the smaller customer segments. At M1xchange, we believe this will strengthen the adoption of alternative credit assessment tools by financial institutions. This advancement promises greater transparency and efficiency in lending, driving greater adoption and sustainable growth in the priority sector.”
Pushkar Mukewar, Founder & CEO, Drip Capital: “The RBI's decision to link the FX-Retail platform with the Bharat Connect platform of NPCI is a crucial step towards democratizing access to foreign exchange for MSMEs. By integrating FX-Retail into the apps of banks and non-bank payment system providers, this initiative simplifies registration and transaction processes for businesses that are critical drivers of India's export economy.
For MSMEs, which often grapple with opaque pricing and limited access to competitive forex rates, this move ensures greater transparency, fairness, and cost-efficiency. The enhanced user experience and security provided by this linkage will empower MSMEs to manage their foreign exchange needs with confidence, reducing the burden of hidden costs and inefficiencies.
We see this as a critical milestone in India’s journey to boost export competitiveness and enable MSMEs to thrive in the global market. This alignment of technology and policy will not only streamline forex transactions but also bolster the resilience of small businesses, ultimately driving India's growth story forward.”
