NBFCs issued alert by RBI against money muling
By Vaibhav Aggarwal
Apr 7, 2011
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Alerts have been generated by Reserve Bank of India to all non banking finance companies (NBFCs) against money laundering activities of fraudsters. The NBFCs have been asked to be careful against scammers using third party deposit accounts on illegal basis by what is known as money muling. The third party here acts as money mules.

The NBFCs have been advised to strictly adhere to 'Know Your Customer' norms as a preventive against any illegal usage of their schemes.

"In some cases these third parties may be innocent while in others they may be having complicity with the criminals," RBI noted.

In case of a money mule transaction, one person who has an account with the bank is made a money mule. He receives funds in his account and then transfers them to the account of the scammer after a certain commission. An individual can be made a money mule without his knowledge and often people also choose to be the same.

Money mules are hired by various methods like spam e-mails, advertisements on genuine recruitment web sites, social networking sites, instant messaging and advertisements in newspapers.


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