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  Business   RBI: Jan Dhan may be misused

RBI: Jan Dhan may be misused

PTI
Published : May 24, 2016, 12:54 am IST
Updated : May 24, 2016, 12:54 am IST

Raising concerns that Jan Dhan accounts can be misused by ‘money mules’, RBI deputy governor S.S.

Raising concerns that Jan Dhan accounts can be misused by ‘money mules’, RBI deputy governor S.S. Mundra on Monday warned that they are “very vulnerable” to frauds and asked banks to be on guard against such activities.

He said third parties can be used to launder the proceeds of fraud schemes (such as phishing and identity theft) by criminals who gain illegal access to deposit accounts by recruiting them as ‘money mules’.

He highlighted a recent case where an idle account was used for receiving and transferring large funds without the knowledge of the accounts holder.

“It was an account of a daily labourer in Punjab and the account was opened as a basic one where there is limitation on number of transactions. This amount of transaction was of `1 crore,” the RBI deputy governor said.

The case came to light when the income tax authority served the notice to the account holder.

“This episode highlights the failure of the banks system and processes for monitoring of newly opened accounts,” he said.