RBI drafts rules for temporary holds on suspected money-mule accounts
The Reserve Bank of India has issued draft guidelines allowing banks to place short-term debit holds on transactions or accounts flagged as potential money-mule activity.
The RBI’s draft SOP mandates immediate temporary debit holds on suspected money-mule transactions of ₹1,000 or more, identified through AI and machine-learning tools. When an entire account is deemed a mule, the hold may extend to the whole account, with banks required to inform customers of the reasons and the removal process. Customers have 20 days to submit justification; banks must act within ten days of receipt, or within 30 days if no response is received.
Unresolved holds are reported to the jurisdictional police through the National Cybercrime Reporting Portal’s Citizen Financial Cyber Fraud Reporting and Management System, and must be lifted after 60 days unless a law-enforcement directive extends them. Banks must also continue filing Suspicious Transaction Reports with the Financial Intelligence Unit-India and retain related records for up to ten years.
Why it matters
The rules aim to curb cyber-enabled fraud by giving banks a clear process to block suspect funds while protecting customer rights.
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