The country’s banks have sought the right to seize accounts in cases of illegal transactions. Banks say that this is necessary to take quick action without wasting precious time in getting permission from the authorities. Fraudsters use fake accounts to illegally manipulate money through the banking system.
To prevent cyber fraud through fake accounts, banks have sought the right to seize accounts involved in illegal transactions. They say that this is necessary to take quick action without wasting precious time in getting permission from the authorities.
Banks seize accounts on the basis of internal reasons. However, according to the Prevention of Money Laundering Act (PMLA), they do not have the right to seize customer accounts without seeking approval from the court or law enforcement agencies (LEA).
Fake accounts are being used to manipulate illegal money
A working group of the Indian Banks Association said in its report that in view of this, we can suggest to the RBI to consider it further. Fraudsters use fake accounts to illegally launder money through the banking system.
Thousands of accounts are seized every year, then why such a demand was made?
Banks seize thousands of such accounts every year, but fraudsters quickly create new accounts by taking advantage of loopholes in the system. Banks have proposed to use Election Commission data to verify individuals opening accounts using voter ID and Form 60 in the absence of Permanent Account Number or PAN and limit the number of transactions on such accounts.
The report suggests that artificial intelligence (AI) and machine learning (ML) can be linked to transaction monitoring systems. The working group said that investment in technology, training of employees and collaboration among stakeholders will make the financial sector more secure.
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