NEW DELHI: The Centre has called a high-level meeting of the Central Bureau of Investigation, the Department of Financial Services and public sector banks on Wednesday to devise ways to curb high-value bank frauds amid the growing use of mule accounts, according to two people aware of the issue.
Officials at the meeting will also help devise strategies to fill critical gaps in investigation and enforcement and zero in on procedural bottlenecks, especially delays in securing prosecution sanction under the Prevention of Corruption Act, one person said on condition of anonymity. This issue has increasingly become a sticking point in fraud cases involving bank officials.
“With probes often slowed by approval requirements and coordination challenges between lenders and investigators, the high-level meeting signals a push to streamline processes, tighten accountability and strengthen the system’s response to complex, network-driven financial frauds,” the second person said, asking not to be identified.
According to Reserve Bank of India data, fraud cases in banks and financial institutions involving amounts of ₹1 lakh and above tripled to ₹34,771 crore in FY25 from ₹11,261 crore in FY24. However, the number of such cases decreased to 23,879 from 36,052 during this period.
In January, the CBI registered an FIR against the branch head of a public sector bank and 18 others for allegedly opening mule accounts that were used to conceal over ₹1,000 crore generated from cybercrime and other illicit activities. The agency acted on the basis of its preliminary enquiry, which exposed 13 mule accounts opened in the names of non-existent companies using forged documents.
In June, the CBI launched coordinated searches at 42 locations across five states under Operation Chakra-V to curb mule bank accounts linked to cyber frauds. An enquiry found over 850,000 such accounts had been opened across 700+ bank branches, often bypassing KYC and due diligence norms.
Delay is permission
“The Centre’s crackdown on rising bank frauds signals urgency, but intent must translate into speed. Delays in sanction under the Prevention of Corruption Act and weak coordination with the Central Bureau of Investigation continue to blunt enforcement,” said Gauhar Mirza, a partner at law firm Saraf and Partners. “Meanwhile, mule account networks are outpacing the system. Unless approvals are fast-tracked and accountability fixed, fraudsters will stay a step ahead. In financial crime, delay isn’t procedural, it’s permission.”
There is a need to strengthen the appraisal and monitoring of accounts, according to Mukesh Chand, a senior counsel at Economic Laws Practice, a law firm.
Queries emailed to spokespersons of the finance ministry, the Indian Banks' Association and the CBI remained unanswered till press time.
The amounts involved in frauds are contributed largely by advances-related frauds, the RBI said in the Report on Trends and Progress of Banking in India 2024-25 published in December 2025.
However, frauds of ₹1 lakh and above in public sector banks, as a percentage of gross loans and advances, declined to a decadal low of 0.01% in FY25, lower than 0.04% for private sector banks.
At a meeting between the CBI, officers from the DFS and chief vigilance officers of public sector banks in Bengaluru on 17 June, pending matters pertaining to the investigation and prosecution of bank fraud cases handled by the CBI were discussed and several issues sorted out.
Emphasis was laid on continuing structured engagement and institutional collaboration to overcome procedural bottlenecks, expedite investigations, resolve pending issues, and ensure timely completion of investigations, the CBI said in a press release on 17 June.
