In a significant shift in financial crime tactics, fraudsters are increasingly targeting small business and current accounts to move large sums of illegal money. This new trend marks a move away from the traditional exploitation of individual retail accounts, according to executives from leading fraud-detection startups.
The New Frontier: Business Accounts as Mule Hubs
Previously, scammers primarily hijacked retail and Jan Dhan accounts, converting them into mule accounts used to obscure the trail of stolen funds. However, enhanced monitoring and scrutiny on these savings accounts have pushed criminals towards new avenues. They are now actively turning to business accounts for the same illicit purpose.
Ranjan Reddy, founder of the fraud-risk startup Bureau, explained the modus operandi. He stated that fraud mules are now easily obtaining business Permanent Account Numbers (PANs) and creating fake Udhyam registration certificates. These forged documents are then used to open current accounts, providing a fresh channel for money laundering.
Why Business Accounts Are Vulnerable
The ease of obtaining an Udhyam certificate online for micro, small, and medium enterprises (MSMEs) has inadvertently widened the scope for misuse. This digital process, while beneficial for legitimate businesses, has created a loophole that criminals are exploiting to establish seemingly legitimate business entities on paper.
Rajit Bhattacharya, cofounder of identity-verification firm Datasutram, confirmed that banks are witnessing a rising number of current accounts being taken over and used as mule accounts. "As savings accounts face tighter scrutiny with advanced monitoring tools, fraudsters are actively searching for alternative routes to shift suspicious funds," he said.
A mule account is typically created when an account holder willingly gives up access for a payment or has their credentials stolen. While such accounts were once largely linked to economically vulnerable individuals or migrant workers, insiders note that small business owners are now becoming prime targets.
The Response: Widening the Surveillance Net
To hide the money trail, fraudsters route stolen funds through multiple layered accounts. Jayaprakash Kavala, chief of products at Clari5, highlighted that scammers have begun using bulk payment methods through these compromised current accounts, increasing the scale and speed of transactions.
In response to this evolving threat, fraud-detection startups are assisting banks in expanding their surveillance frameworks. The focus is now extending beyond retail customers to include a sharper watch on business accounts. This collaborative effort aims to close the new gaps being exploited by financial criminals and protect the integrity of the business banking ecosystem.
