Cyber Police freeze 70,000 bank accounts in Kerala; fewer than 5,000 apply for reactivation

Thiruvananthapuram: The Cyber police in Kerala have frozen nearly 70,000 bank accounts over the past 18 months on suspicion that they were being rented out to fraudsters as “mule accounts.”

However, fewer than 5,000 account holders have approached the police or courts to reactivate them. According to police, most owners have stayed away because the accounts were indeed being leased to fraudsters.

So far, only accounts suspected of directly receiving scam funds have been frozen. At a recent meeting between police and bank authorities, officials stressed the need for banks to exercise greater vigilance in opening and monitoring accounts. The cyber wing has been shocked at how so many accounts were opened without proper KYC checks or oversight.

Around 500 account holders have gone to court demanding the reactivation of their frozen accounts, while others have approached the police and banks directly to clarify their cases.

Officials pointed out that stricter scrutiny of customer profiles and unusual transactions could quickly eliminate mule accounts. They added that fraud-related money transfers are concentrated in a few banks where such monitoring is weak.

Earlier, these accounts were mainly used to move money scammed from within Kerala. Now, officials say, funds stolen from victims in other states are increasingly being routed through bank accounts rented out by Malayalis.