Fraudsters shift to India-based mule accounts, cyber risks rise

Fraudsters targeting Indian consumers are increasingly using India-based mule accounts to move stolen money as crackdowns on scam centres in Southeast Asia force criminal networks to change tactics, according to the BioCatch Digital Banking Fraud Trends in India 2026 report.

 Scam syndicates have shifted from routing funds through overseas accounts to using local mule accounts, supported by wider money-laundering networks, AI-powered fraud tools and cryptocurrency transfers. These accounts often appear genuine because they belong to legitimate customers, making them difficult for banks to detect through transaction monitoring alone.BioCatch said banks must combine behavioural, device and network intelligence to identify mule activity early and prevent fraud before funds are withdrawn. 

The findings come as authorities intensify efforts to combat cybercrime. According to the Ministry of Home Affairs, the I4C had identified 27.37 lakh Layer-1 mule accounts by January 2026, helping prevent fraudulent transactions worth more than ₹9,518 crore.