Ahmedabad Bank Account Rental Scheme Exposes Money Muling Networks in India's Financial System

Two men from Jamalpur, Ahmedabad have been arrested by Gaekwad Haveli Police for allegedly renting out their bank accounts to an online fraud network in exchange for a 1% commission on illicit deposits. The case highlights how India's banking system is being exploited by criminal networks through so-called "money mules"—individuals who allow their accounts to be used for transferring illegal funds.

The investigation, triggered by suspicious transaction alerts from the Cyber Centre for Excellence in Gandhinagar, uncovered a scheme where fraudulent proceeds from criminal cases registered across multiple states were funneled through legitimate bank accounts before being withdrawn via cheques. Authorities have identified this as a growing challenge in combating cybercrime and money laundering in India's increasingly digital financial landscape.

Background and Context

Money muling has become an integral component of transnational criminal enterprises, with fraudsters recruiting individuals—often through social media or direct contacts—to provide their bank accounts for transferring illicit funds. According to the Financial Action Task Force, these networks typically offer small commissions of 1-5% to account holders, making it an attractive proposition for financially vulnerable individuals despite the significant legal risks.

The Indian context presents particular challenges, with the country's rapid digitization of financial services creating new vulnerabilities. A 2022 Reserve Bank of India report noted a 28% increase in fraudulent transactions involving compromised bank accounts, with many cases linked to organized online fraud operations spanning multiple jurisdictions.

Key Figures and Entities

Police have identified Mohammad Faizan Qureshi as the primary account holder whose Union Bank of India account in Jamalpur received funds linked to criminal cases registered in Andhra Pradesh and Mathura. According to court documents, Qureshi admitted during questioning that he was recruited by an intermediary identified only as Aaqib, who promised both him and an accomplice, Sahid, a commission for allowing their accounts to be used.

The scheme involved two bank accounts: a Union Bank of India account held by Qureshi and a Kotak Mahindra Bank account belonging to Sahid. The funds, amounting to several lakhs of rupees, were systematically withdrawn through cheques and handed over to unidentified associates, creating a complex paper trail that investigators are now working to unravel. The Gaekwad Haveli Police station has registered formal charges and is pursuing leads to identify the broader criminal network.

Legal and Financial Mechanisms

The operation exploited standard banking procedures while obscuring the origins of funds through multiple account transfers and cheque withdrawals. Under India's Prevention of Money Laundering Act, allowing one's bank account to be used for money laundering carries severe penalties, including imprisonment of up to seven years and substantial fines.

Financial institutions are required to implement Know Your Customer (KYC) protocols and monitor suspicious transactions under guidelines established by the Reserve Bank of India. However, this case demonstrates how determined criminal networks can circumvent these safeguards by leveraging willing account holders, creating what investigators describe as "layering"—the process of obscuring the origins of illegally obtained funds through a series of transactions.

International Implications and Policy Response

The Ahmedabad case reflects a global phenomenon of money muling networks that operate across borders, with similar schemes reported in Europe, Southeast Asia, and North America. The International Criminal Police Organization (INTERPOL) has identified money muling as a key facilitator of organized crime, financing activities ranging from human trafficking to terrorism.

In response, Indian authorities have strengthened cooperation with international law enforcement through mechanisms like the Egmont Group of Financial Intelligence Units, facilitating information exchange on suspicious transactions. Additionally, the Ministry of Home Affairs has launched public awareness campaigns targeting vulnerable populations about the risks and legal consequences of participating in money muling schemes.

Sources

This report draws on statements from the Gaekwad Haveli Police, documentation from the Cyber Centre for Excellence in Gandhinagar, regulatory guidelines from the Reserve Bank of India, and reporting from established Indian news outlets covering financial crime between 2022-2024.