Kerala Identified as a Growing Hub for Mule Accounts: SLBC Official

Fast Summary

• Mule Accounts and Cyber Fraud: the State-Level Bankers’ Committee (SLBC) in kerala and Lakshadweep has warned about fraudsters increasingly targeting students to open mule accounts for laundering money and committing cyber fraud. Legal consequences include imprisonment, criminal records, and blacklisting by financial institutions.Awareness campaigns are being conducted in educational institutions to prevent such activities.

• Re-KYC Renewal: In Kerala, 57 lakh bank accounts (20% of total accounts), including PM Jan Dhan Yojana accounts, need renewal for Know Your Customer (re-KYC). Pending re-KYC prevents account holders from accessing benefits like government subsidies.

• government-backed Schemes: SLBC highlighted schemes aimed at unorganised sector workers-Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY),Pradhan Mantri Suraksha Bima Yojana (PMSBY),Atal Pension Yojana (APY)-and urged the public to take advantage of these initiatives.

• unclaimed Deposits: Across India, ₹67,000 crore worth of deposits remain unclaimed. Importance of account nominations was emphasized to avoid such situations.

• Financial Inclusion Campaigns: As part of a nationwide campaign by the Department of Financial Services under the Union Finance Ministry, 500 panchayats in kerala have been covered thus far. The campaign will end on September 30, 2025.

Indian Opinion Analysis

The growing misuse of mule accounts highlights an alarming trend that targets vulnerable sectors like students in India’s fight against digital fraud. While legal consequences can deter offenders, increased awareness among youth is essential for proactive prevention-a commendable move through educational campaigns as part of broader national strategies on financial literacy and inclusion.

The re-KYC process demonstrates India’s efforts toward enhanced governance in financial systems but also stresses the administrative challenge posed by handling millions of pending updates. Facilitating subsidies via streamlined processes is critical for low-income beneficiaries who frequently enough rely heavily on welfare schemes tied to bank access.

Unclaimed deposits underscore systemic gaps that coudl be bridged with improved customer engagement practices like mandatory nominations during account creation processes.Furthermore, expanding enrollment into government-backed insurance and pension schemes can strengthen social security programs aimed at millions employed in informal sectors across India-and elevate trust within underserved communities toward banks as enduring partners rather than mere service providers.

For read more click here.